please help! credit score for loan...

LaurenM_2

I need to get a £6500 loan for a new car, except i'm being turned down left, right and centre due to a confusion over a direct debit.

I got a tv on hire purchase last july, it was for my partner to pay for, except he lost his job a month later, we agreed with GE money a reduced payment of £5 a month until we were back on our feet. We gave them our bank details and they sent us a letter confirming the reduced payment. However, the letter did not make clear that we had to set up a standing order, and as they had taken our bank details, made it seem as if they were going to be taking the £5pm out of our account via direct debit.

So now I have a bad credit score, all because of one missed payment of £5! I somehow need to contest this, but have no idea where to start with the process.

Has anyone else had a similar problem, or know where to start with contesting a bad credit rating?

Thanks.

CLAPTON

there may be many reasons why you were turned down

one missed payment is unlikely to be a major factor but being on a payment arrangement may well be so

what exactly do your credit files say?
what is your income?
what other debts do you have?

Londonboy_3

Lauren - I am not being judgemental (please don't take this the wrong way) but a sudden change of circumstances meant you could not manage to pay an agreed credit arrangement for a TV, which I imagine must have been less than 1k.

A car loan for 6.5k will cripple you if circumstances change - is there any way you could try and buy a cheaper car or a bike?

chalkie99

Londonboy is spot on.

If you can only manage £5 a month on a TV then borrowing that much for a car is asking for trouble.

LaurenM_2

£5 is no longer a stretch, we're about to put the TV payments back up to the full price, and I wouldn't get a loan if I wasn't 100% sure I could afford to pay it.
The main reason we couldn't afford to pay for the TV at the time is because I was pregnant and not getting any Maternity Allowance at that point, however I'm now back at work, and can afford repayments.
I earn enough money to take out a loan, that's not the problem, and it was only the one missed payment for the TV. I have no other loans, nor do I owe anyone any money except GE Money.
I was told over the phone by GE Money that as I missed my £5 payment, it would affect my credit for 6years. I don't feel that is right for a. £5 and b. when the letter didn't state clearly it was for us to set up the payment when they took our details.

So does anyone actually have any constructive advice on how to contest this.?

LaurenM_2

Brock_Landers wrote: »

Seems that this more then one missed payment! Have you checked your credit file to see what exactly it is that GE have done?

Yeah if £5 is a strech the a car loan is going to ruin you.

£5 isn't a stretch thanks very much, and it was just the ONE payment.
It'd be nice if you didn't judge.

digitalphase

LaurenM wrote: »

So does anyone actually have any constructive advice on how to contest this.?

Yes, first things first: get a copy of your credit report from Experian or Equifax. They both do free 30 day trials and you can view them instantly online.

Once you know what's on your file, post back and we'll go from there

Londonboy_3

Agreed. Take a look at what the actual file says. The difficulty is you are not contesting on the basis that the score is due to an error or mistake by the lender -you did need to lower your payments on a previous credit agreement. It is this possibly more than the missed £5 payment which may have scored you down.

From a lenders perspective all they will see is that in the relatively recent past you had a problem (albeit short term) paying back a relatively low amount of credit, and as such the risk on lending a higher amount of credit increases.

CLAPTON

certainly get your credit files and see whats actually on them.

however, its likely that the agerement to pay only £5 is recorded as an 'arrangement to pay' which will seriously affect your credit rating... the single missed £5 payment as such will only have a small impact.

~Brock~

CLAPTON wrote: »

certainly get your credit files and see whats actually on them.

however, its likely that the agerement to pay only £5 is recorded as an 'arrangement to pay' which will seriously affect your credit rating... the single missed £5 payment as such will only have a small impact.

Clapton is spot on here. The fact that you entered into an arrangement with a creditor is likely to be a huge factor in how other lenders will view you as a future risk. The fact that one of the payments under that arrangement was late/missed is incidental.

pendragon

I agree to check your credit reference file. If there is only 1 missed payment then this is highly unlikely to be the sole reason for you being refused. There are many reasons why your profile of information is not favourable to a lender including income/expenditure, lack of credit experience at that level, short time at address/employment to name afew...