My Credit History was never released...

adam678_2

I've been using the same HSBC current account for 9 years. I don't understand any of the 'banking lingo' I see and hear on TV, it's all alien to me. I'm just happy sticking with my Debit card and the same bank account I've been using for 9 years. I have no overdrafts, no credit cards and nothing to worry about. My wages are paid into the account, recurring bills are paid out as are direct debits for my Sky subscription as well as a few charities and board for my parents. I've never missed a payment on anything in my life and I have nothing on finance. Even all the mobiles I've ever owned have been bought as 'pay as you go'.

But I'm 21 now and I'm looking to start my own business and hopefully move out soon.

On September10th I applied for a small personal loan through my HSBC internet banking to help start up my online business (I'm a web developer by trade), however I was declined.

On the same day I tried applying for a loan with Sainsbury's online, but was declined again, I then applied online for a loan through Alliance & Leicester but was declined yet again (this time by letter)

About a week later I decided to try again through Sainsbury's and Alliance & Leicester but was rejected again both times. Confused as to why I was being rejected I did some research and queried my credit report with Experian only to find that my HSBC current account wasn't listed. The only thing that was on there was a mail order account with 'Next' that I apparently opened in 2007, however I don't even remember opening this and it was never used.

I rang HSBC to complain and they sent an apology letter accompanied with an 'opt-in' form to release my credit history. However this is going to take 8 weeks. I handed in the form to my local branch in person and it was there that I was told the more loans I apply for the worse off my credit report will be.

On the 2nd of this month I called HSBC to try and apply for one last loan. I was hoping that given that my credit report was empty and an 'opt-in' form was being processed, the third party credit check could be skipped and the loan granted or declined based on the 9 years of internal credit history HSBC have on me. I tried to explain the situation the best I could to the guy on the phone however he did a credit check anyway, which I technically didn't consent to. (The loan was obvious declined too)

So as things stand at the moment, my credit report is empty and I have 2 loan requests from HSBC, 2 loan requests from Sainsbury's and 2 loan requests from Alliance & Leicester.

I called up HSBC 3 times the other day to explain the situation and try to get the loan requests removed from my history. I must have been put on hold a dozen times before finally being put through to a manager who took my detailed and agreed to get the ball rolling with regards to removing the request from my credit report. He said it could take upto 4 weeks but that's fine.

I've also called Sainsbury's and Alliance & Leicester but never mind who I talked to they told me it was not possible to get the records removed. One guy from Alliance & Leicester was actually very rude and quite patronising about it. According to their policy they can only remove a record from a credit report if it was due to a mistake on their behalf, and under no other circumstances can it be removed.

However, although I agreed to the credit check to be carried out, in my opinion it was the mistake of HSBC for the loan declines due to them never releasing my credit history or informing me that I needed to release it myself.


On these grounds are there any legal routes I can take to make Sainsbury's and Alliance & Leicester remove the credit check searches they did against me. Because having all these credit searches will heavily effect my credit score.




Thanks in advance,
Adam

ILW

I think the main problem you have is that you have no credit history (as in borrowing and repaying money). This is what lenders like to see.
If your account is with an HSBC branch, you could arrange a meeting with the manager and try for a loan or overdraft based on your banking record with them.

As far as the searches on your credit file go, you did authorise them when you made the applications so it is unlikely they will be removed.

adam678_2

ILW wrote: »

I think the main problem you have is that you have no credit history (as in borrowing and repaying money). This is what lenders like to see.
If your account is with an HSBC branch, you could arrange a meeting with the manager and try for a loan or overdraft based on your banking record with them.

As far as the searches on your credit file go, you did authorise them when you made the applications so it is unlikely they will be removed.

Something I forgot to mention was that I have had 2 payday loans in the last month (I had to dip heavily into my savings to secure a string of domain names after the loan declines). I paid back the first payday loan on time and in full and the second one is due at the end of this month and will also be paid back in full.

These loans are on my credit report and I have no desire to have them removed.

So I do have some credit history, albeit not very much.

I should also point out that the loan I'm after is only £11,000. I plan on getting the loan with abbey national and setting up a business account with them. And I happen to know that Abbey use Experian for their credit checks. Could anyone advise on what kind of credit score I would require to a secure a loan of that size?

Abbey have much cheaper rates than HSBC and after I sort out my credit report it would be nice to know what kind of score I would need to get the loan from Abbey so when the time comes I can assess whether it's worth the risk of applying with them and risk another decline or just go back to HSBC to see what they can do for me.

Thanks,

[Deleted User]

adam678 wrote: »

I should also point out that the loan I'm after is only £11,000. I plan on getting the loan with abbey national and setting up a business account with them.

Hi Adam,

That's still a pretty chunky personal loan, to be honest, and banks are highly unwilling to lend for business reasons to personal customers, as it's just too high risk for them. It's tough getting credit anyway, so to try and apply for what is actually quite a sizeable loan, to set up a business, is likely to put many lenders off.

Coupled with lots of searches in a short space of time, it makes it look like you're desperate for credit.

Probably the best bet is just to hold fire for now and DON'T apply for any credit for a few months. Let these credit report searches fade into the past a little and use that time to look around.

spethmeister

I know nothing about what your options are for your credit history issue but just wanted to advise that you avoid Abbey like the plague for getting a loan as aside from my own experience with them, I have seen several similar and frankly quite shocking stories on here of their appalling systems and non existant customer service. Direct debits go wrong / don't get set up, payments don't get allocated properly, you may get told you can make overpayments when you can't... they are a bunch of numptys. Look elsewhere for your loan when your credit file is sorted!!

Ames

Stop applying for credit! More than three searches in six months affects your rating, and several applications in a week will just make you look desperate. As others have said, you might have a banking history but you don't have a credit history, and getting a biggish loan without one will be very difficult, especially in the current climate.

ILW

Why would you need £11,000 to set up as a self employed web developer?

adam678_2

ILW wrote: »

Why would you need £11,000 to set up as a self employed web developer?

I'm not looking to be a freelance web developer. I'm looking to use my skills to setup my own online business.

I have a 16 page business plan detailing every aspect of my business. My three year forecast indicates an annual turnover of £300,000 with a profit of £250,000. And that's not me being over-optimistic, if anything that's me underselling my business.

My main competitor has an annual turnover of $8,000,000, and my business offers a better service at a cheaper rate. I know the market extremely well and have contacts within the industry that I've known for some time and are willing to help me out.

I know I've been naive when it comes to credit scores and applying for loans but when it comes to making money online and developing websites that work; I know what I'm doing. I'm an accomplished .NET developer with Microsoft training. I also know Adobe's create suite inside out, so I do all my design and development work myself.

If I had to put a value on the work I've carried out over the last 3 or 4 months for the website I'm developing it would be in the region of £20,000.

An £11,000 loan would be ideal, but £7,500 is the absolute minimum I would need. And most of that would go towards paying freelancers to carry out work in areas I'm not familiar with.

The only reason I've been applying for personal loans was because it was quicker than applying for business loans (I don't have a business account and my business plan wasn't complete at the time). When I was applying for these personal loans (which I did in a very short space of time, I suppose you could call them 'impulse loans') and agreeing to credit checks I was assuming they would check that I'm fully employed and can afford to payback the loan, but little did I know...



My plan was to use the loan money to get the website finished then look into opening a business account and seeking advice from solicitors and accountants to make sure everything was good to go.

Like I said, I don't do "banking" and I know I've screwed this up for myself pretty bad. I can't apply for any type of loan right now but in 8 weeks time I will make sure I make an appointment with my bank manager and present him/her with my business plan and see if we can work anything out.

If anyone else has anymore advice for me it would be much appreciated otherwise thanks for you help.



Adam.

ILW

adam678 wrote: »

I'm not looking to be a freelance web developer. I'm looking to use my skills to setup my own online business.

I have a 16 page business plan detailing every aspect of my business. My three year forecast indicates an annual turnover of £300,000 with a profit of £250,000. And that's not me being over-optimistic, if anything that's me underselling my business.

My main competitor has an annual turnover of $8,000,000, and my business offers a better service at a cheaper rate. I know the market extremely well and have contacts within the industry that I've known for some time and are willing to help me out.

I know I've been naive when it comes to credit scores and applying for loans but when it comes to making money online and developing websites that work; I know what I'm doing. I'm an accomplished .NET developer with Microsoft training. I also know Adobe's create suite inside out, so I do all my design and development work myself.

If I had to put a value on the work I've carried out over the last 3 or 4 months for the website I'm developing it would be in the region of £20,000.

An £11,000 loan would be ideal, but £7,500 is the absolute minimum I would need. And most of that would go towards paying freelancers to carry out work in areas I'm not familiar with.

The only reason I've been applying for personal loans was because it was quicker than applying for business loans (I don't have a business account and my business plan wasn't complete at the time). When I was applying for these personal loans (which I did in a very short space of time, I suppose you could call them 'impulse loans') and agreeing to credit checks I was assuming they would check that I'm fully employed and can afford to payback the loan, but little did I know...



My plan was to use the loan money to get the website finished then look into opening a business account and seeking advice from solicitors and accountants to make sure everything was good to go.

Like I said, I don't do "banking" and I know I've screwed this up for myself pretty bad. I can't apply for any type of loan right now but in 8 weeks time I will make sure I make an appointment with my bank manager and present him/her with my business plan and see if we can work anything out.

If anyone else has anymore advice for me it would be much appreciated otherwise thanks for you help.



Adam.

If you have a sound plan which can demonstrate a gross profit of over £200k in the first 3 years, and have many contacts within the industry, I would suggest taking on equity investors may be the way to go. Also having someone with a bit of finance experience with you could well pay dividends.

adam678_2

How about if I'm turned down by my bank manager in 8 weeks, I ask my parents to take a loan out from HSBC for £11,000 and transfer it to me. I pay them the monthly repayments plus a cut of the profits I make (probably 10% for the life of the business).

Would HSBC be okay with this legally?

CLAPTON

your parents can, subject to credit rating and income, legally take out a loan from any institution willing to lend to them

they can legally give any amount of money to you

or they can lend the money to you at a rate of interest
or they can 'invest' in your enterprise for a profit share

the lattter two may have tax implications for both them and you

HSBC have no reason to know let alone agree