Poor Credit - Loans - Is this a joke!?

mattpatch

Hi All,

I recently tried to apply for a loan, to reduce my monthly outgoings.
I was rejected.
I applied for another.
I was rejected.
I applied for another.
I was rejected...... this probably sounds very farmiliar.

After further investigation via experian and credit expert, it became apparent that the reason I might have been rejected is because I have a car finance loan of 8k over a 3 year period and because constantly applying for credit, seriously F**ks up your credit rating. DESPITE NOT BEING ACCEPTED!!

I have resorted to payday loans to cover my monthly outgoings. I don't want to knock payday loans because they gave me money when I really needed it, but they are not the long term solution.... obviously.

Can anyone suggest a way to get a loan to reduce my monthly outgoins and pay over a longer period OR improve my credit score so I am more desireable to lenders. (I know this must be the most commonly asked question!)

Is this refusal to lend part of the banks being more responsible as to who they lend?

I honestly cannot understand why I am so undesireable as a customer....

Cheers all!

StuTheDon

Hi,

Firstly - stop applying for loans now as you rightly point out it is only making things worse.

Have you tried your own bank that you have your current account with? If they dont accept you then you can forget about getting a decent loan elsewhere.

What does your credit report say? Any defaults, late payments? What is your salary?

RobertoMoir

mattpatch wrote: »

I have resorted to payday loans to cover my monthly outgoings.

...

mattpatch wrote: »

I honestly cannot understand why I am so undesireable as a customer....

See, you knew the answer all along. I'm personally of the belief that problems with credit are not solved by getting more credit, for much the same reasons that firefighters don't try to put out fires with buckets of petrol.

I admit I'm looking at this with an especially cynical view, but by anybody's book this sort of pattern of borrowing isn't going to make you look a great risk.

Applying for more loans over and over just makes you look desperate, and this really isn't helping. You really do need to try and find a way to break out of this cycle instead of perpetuating this (lets face it, without solving the core problem that brought you here in the first place, the 'normal' loan will just end up being the same kind of thing as the problem with the payday loans but over a longer period of time.

Luksi

StuTheDon wrote: »

Hi,

Firstly - stop applying for loans now as you rightly point out it is only making things worse.

Have you tried your own bank that you have your current account with? If they dont accept you then you can forget about getting a decent loan elsewhere.

What does your credit report say? Any defaults, late payments? What is your salary?

I agree that by applying constantly for a loan you make your credit rating look worse.
However saying that one can forget about a decent loan only because their own bank wasn't willing to give one out is wrong.
A few of my friends did get (in the past or even recently) a loan far more often with a different bank lender to the one they've got their current accounts with. This might seem a bit fishy, but it's true.
But as was said above, banging on every single door and hoping for a loan is not the way to approach.
Try to apply for smaller amount or lower monthly instalment.
To say that the times are tough for some of us now and being declined (over and over) is something we have to put up with...

RobertoMoir

Luksi wrote: »

I agree that by applying constantly for a loan you make your credit rating look worse.
However saying that one can forget about a decent loan only because their own bank wasn't willing to give one out is wrong.
A few of my friends did get (in the past or even recently) a loan far more often with a different bank lender to the one they've got their current accounts with. This might seem a bit fishy, but it's true.
But as was said above, banging on every single door and hoping for a loan is not the way to approach.
Try to apply for smaller amount or lower monthly instalment.
To say that the times are tough for some of us now and being declined (over and over) is something we have to put up with...

Good advice in general, but as the OP is essentially looking for a consolidation loan, even if they're not using the actual phrase itself, then "Try to apply for smaller amount or lower monthly instalment." isn't going to much to help in this particular case. Leaving aside my opinions on more credit as an answer to credit problems for the moment, it does seem likely that a loan of any size smaller than the OP needs to cover their current debt isn't going to help very much.

iolanthe07

By borrowing more to consolidate you will only dig yourself into deeper poo long term, unless you address the underlying reasons for your debt. For most of us the answer lies in spending less, earning more, or a combination of the two. Taking on more debt is rarely the answer.

Luksi

RobertoMoir wrote: »

Good advice in general, but as the OP is essentially looking for a consolidation loan, even if they're not using the actual phrase itself, then "Try to apply for smaller amount or lower monthly instalment." isn't going to much to help in this particular case. Leaving aside my opinions on more credit as an answer to credit problems for the moment, it does seem likely that a loan of any size smaller than the OP needs to cover their current debt isn't going to help very much.

If a consolidation loan is what they are looking for than you sir are correct.
Nevertheless, I still think that applying for a smaller amount is better (if accepted) than nothing. But to say that, I can anly assume that this type of loan is harder to get nowadays and as it's been said above might lead to higher debts in the future.

Jharvey_3

Hi
Its like looking in a mirror - this was me this time last year. I was paying out about 800 pounds a month on loans, paying back payday loans, and taking them out again, and getting seriously stressed juggling everything. The best thing I ever did was phone CCCS. They told me not to answer the phone to the creditors that kept ringing me, sent letters out etc and now I pay 218 per month to CCCS and they divy it up between all my creditors. I know a DMP stays on ur credit listing for 6 years, but its going to take me that long to improve my credit rating anyway.
If you want to consolidate your debts this is the best way, but just my humble opinion!!!

mattpatch

Thanks for your help everyone.

Just to backup why I think a consolidation loan is the answer to my problems. Everything Below is the truth, because after all.... what the point in lying? lol

Job: Graduate Engineer (first year in employment)
Annual Income: £22,000 (Before Tax)
Monthly Income: £1300 (After Tax)

Outgoings p/m
Car Finance £200
Car Insurance £100
Car Petrol £200 (yes £200!, and yes no other option other than car)
Phone Bill £50
Rent £140 (live with parents)
Student Loan £50 (Approx)
Partner £300 (money borrowed from partner whilst at uni £3000 over 10-11months)
Bank Maintenance Charge £15
Total £1055 p/m £1300-£1055=£245

£245 is a fine to live on I know, but that's where the payday loans come into it, this month I owe £375, therefore needing to take another payday loan to cover the one I already have. And now the banks are having a laugh with charges!!

I expect you are thinking..... 'why don't you ask your partner to postpone payments for a few months??..... Or ask relative friend for a small loan to get myself out of this rut?... they seem to have worse problems than me thanks to the credit crunch!

Therefore a loan of around 3-4K would pay off my partner and a chunk of my overdraft. reducing monthly repayments to around £200 p/m instead of £300 p/m (swaping partner payments to repaying the loan) and get me far enough away from my overdraft limit to stop receiving charges. Plus my wage is due to increase in the spring.

Sorry if to much info

for all help I am thankful!