knocked back for asda loan, ge money not doing personal loans anymore?

hanwil

hi there this is the first time i have posted on here.

have recently applied for a loan with asda, to consolidate 2 loans, one i have with a&l for 5,000 and one i already had with asda, also 5,000 left to pay on it (was 10,000).

Anyway, we have been refused, so i checked my credit rating, and it is good, above average - so couldnt understand why we had been refused. Asda refused to give a reason why.

What i thought was odd was in the email that asda sent us, BEFORE they had even said yes or no to loan they wrote if we cant offer you a loan our partner company freedom finance will contact you, asda didnt even bother to contact us, the next person who contacted us was freedom finance, but we didnt want to deal with them as its a higher average apr. So we then contacted asda to find out why we had been refused, which they couldnt give us an answer too.

After looking on our credit rating, it says that GE money searched our account (which is who asda loans is with as we already have one), and on researching it a bit there is a lot of stuff on how GE are winding down their third party personal loans (still offering secured) and also on their website it says they are no longer offering personal loans!!

So i can only assume that we have been refused as they simply arent offering anymore, and then we got this call of the 'partner company' offeing a loan? Problem is now we have a search on our record, and im a bit worried to apply for another loan incase we get knocked back, not due to bad credit (as it is good) but due to already being searched?

Is there anything i can do about this, like get the search taken off? And will the search effect us getting another loan (thinking of applying to a&l as we have a loan with them, so consolidate with them instead) how long should i leave it before applying for another?

thankyou very much for reading this essay and i hope someone can help, just very confused with it all!!!

CLAPTON

A couple of searches won't make much difference to your creit rating.

But why do you want to 'consolidate' the two loans?..are they very high APRs ?

mrcow

What's the point of consolidating the loans?

Do you have PPI on either of your two exisiting loans btw?

hanwil

we are consolidating the loans as we have one loan over 3 years and one loan over 4 years - they both have about 2 years left to run on them, but we want to consolidate them and take them over a longer period (4 years again) as it will cut our payments by 165 per month, i am pregnant with our second child and would like to take a full year off on maternity - 3 months of this will be unpaid, so we wanted to save the money so i can take the extra time off.

hanwil

I have no PPI on the loans

hanwil

So if we reapply next month will the fact that we have been turned down for the asda loan effect someone else accepting us? I have checked my credit rating and it is very good - i got a credit report (i know that other companies use there own tho) and the only thing that came up was that i have had 3 searches in 6 months?

I looked through some of the advice on here, and we did have a credit card that isnt in use, we have never used it just got it to get a discount off some furniture (save 10% if you open a card etc) and we paid the balance in full but never cancelled the card - it had £3000 to spend on it. We also had a next catalogue - which we werent aware we had £2000 credit to use on, we have cancelled both of these. Other than that we have a store card, also not in use, so have also cancelled that. Now the only things we have left are these 2 loans. We have no other credit cards or store cards etc, just an overdraft facility with our bank.

I am just worried that we are doing the wrong things and by tinkering with the rating when it is already good are making it worse lol!!

CLAPTON

Basically you have 10k worth of debts... when you apply for a further 10K loan the lender will see you as potentially having 20k worth of debts...
. you don't say what your income is but 20k worth of debts is an awful lot of debts ...
I know you intend to consolidate the debts but there is no legal obligation for you to do so.

A year ago three searches wouldn't seem a lot but its difficult to know in the current climate...but if you are going to apply you would be best applying for a smaller loan (5k) ... pay off one of the loans and then apply later for the remaining amount.

There are differing views about cancelling CC cards..personally I see no benefit to your credit rating in doing so... in fact using a CC for everyday things and paying in full each month will probably enhance your credit rating (set up a DD so you never ever forget to pay).


Catalogues are best cancelled.

mrcow

Hi,

The PPI question was just because you mentioned A&L and as they have already been fined for miselling PPI, there was a chance for you to claim the insurance money back if you wanted.

The reason for asking "why" for the consolidation is because we get loads of people on here who are in a financial mess that look to consolidation as a viable solution when what they need to be doing is sorting the problem rather than borrowing their way out of it. Obviously your situation is slightly different.

I wouldn't worry too much about the search from ASDA. If you'd had loads of searches which were indicating that you'd been scrabbling around for money then it might. But one or two aren't going to have a massive impact.

In terms of sucessfully getting a new loan going forward, it's usually easiest to get one through your own bank. Who do you bank with and are they competitive? If not, then absolutely A&L may be a better way to go as you already have a good borrowing record with them and they'll be able to see that you'll be cancelling the original loan. Sometimes applying face to face can help if you can manage it.

I wouldn't overly worry about ASDA and what happened - the current financial climate is making a lot of lenders alter their lending criteria.

Congratulations on the baby!

~Brock~

You say your credit rating has been judged as 'very good' - what does that mean on a posible scale of 1 to 10. Is there anything above 'very good' such as 'excellent'?

You need to realise that times have changed. Lenders no longer have the appetite to lend £10,000 on an unsecured basis to anyone other than the best risk category of customers.

There is pressure on the banks to improve their liquidity positions. There is pressure on lenders from rising bad debts with people losing their jobs due to the recession. Where PPI was sold to cover this there is pressure from the CMC sponsored drive to claim that they were all mis-sold. There is pressure from the unenforceable agreement brigade.

Unfortunately the outcome of this is that unsecured credit will go back to being a priviledge as opposed to a perceived right as it has been of late.

I appreciate that this is probably no help to you whatsoever, but it may hopefully help you to appreciate the situation.

mrcow

~Brock~ wrote: »

Unfortunately the outcome of this is that unsecured credit will go back to being a priviledge as opposed to a perceived right as it has been of late.

I appreciate that this is probably no help to you whatsoever, but it may hopefully help you to appreciate the situation.

I know that this isn't helping the OP either, but just to pick up on this point, I really can't see this as being a bad thing. Millions across the country are completely overstretched with debt. Obviously it means that there will be harder times ahead for those who will need to start addressing their financial skeletons rather than burying their heads about it, but imo it's a necessary evil.

Since when did it become acceptable for someone with a salary of say £25k to have £10K, £20K or even more of unsecured debt? It's almost become the norm for many. The situation is not sustainable and the system always had to give at some stage. It was just a matter of when.

hanwil

thanks for the replies,

we earn 50,000k between us (husband and i) and have 10k in 2 loans that we want to consolidate. We applied for the loan in his name (am wondering now if we should have applied in joint name, i dont know if it makes a difference) as he earns the most (37,000k).

I was wondering if we could have been knocked back due to having so much unused debt which is why i went about cancelling it (as 3000 on a credit card, and 2000 on a next account totals 5,000 we could potentially get into debt with!!) and was going to wait to re apply when the credit rating is updated (i think it says it can take a month). Have never been refused before or even checked credit score, so its all new to us!!

we bank with halifax, we have our mortgage with them and our current and savings account, so should we try there before a&l? they offer the same rate (8.9 apr typical).

thanks for your replies! :-)