Declined credit but excellent credit score

rodgers

Hello,

I decided that I wouldn’t mind a new car, I have an 8 year old Micra and it’s starting to show its age, I’ve had it for nearly 3 years. I’m 21 and have worked full time in the same job since I was 17. I have savings in shares which could be used to fund buying a new car but I don’t want to sell them at the moment because they are doing very well for me and selling them now would be too early (I believe there value will go up more than the £633 interest of a loan). I was looking at a personal loan of £7500 over 24 months at 8% with Nationwide costing £633 in interest.

However before I applied for one I came on here and checked out the advice and it suggested getting a 0% credit card for 12 months. I would have been able to pay this cost of the car off within a year (even if it meant using my savings in shares) so it sounded right for me.

I went to apply online at Tesco but got declined. So I tried Sainsbury’s and also got declined. Thought it was a bit odd because I’ve never had a loan or debt other than using an authorised overdraft from time to time with my bank (although this is set at a high £950 which is more than I really need and never used that much of it). So I decided it might be a good idea to check my credit history on Experian and I was rated excellent (965) and possibly only went down from 999 because of been declined from Tesco and Sainsbury’s?

So anyway I thought with an excellent credit rating I would be able to get a personal loan from my bank (who I have been with for ages) for £7500 over two years. However I was again declined... I rang up and they told me it was because of my credit score but couldn’t tell me much more than that. I asked if I could go down to my bank and speak to someone but they said they wouldn’t appeal it as it would be likely declined again because It was declined due to my credit score.

I’m not desperate for a loan and will probably end up doing it the good old fashioned way of saving up. This was my original plan for getting a new car. However due to frustrating things happening with my car now I was hoping I could get one sooner with a loan.

I’m just a bit surprised that I can’t get credit as I know I would be able to comfortably pay off each month as I still live with parents so my outgoings are very low.

Anyway I’ve changed my overdraft down to a more modest £300 in the hope that this would have some effect in the future and maybe I’ll leave some of my savings in the bank instead of moving it straight into shares. Do the banks know how much I have invested in shares? Or do they think that all the money I’ve transferred to brokers is gone for good?

Looks like I’m stuck with my little banger for a while longer!

Cheers,
Mark

rodgers

Ok, so I have now extended my curiosity to using creditexpert to find matches for a loan for £7500 over 2 years and the only match coming back is from Black Horse at a wopping 21.9%

Is it really this hard to get loans these days or is there something up with my credit history? Is it because of my status? Living with parents, age 21, loan reason for a car?

Should I be bothered and forget about it or should I look into this in more detail?

Thanks,
Mark

_Andy_

The issues are probably age and lack of credit history.
Don't pay much attention to the Experian scores etc as each lender scores differently.

Dabooka

_Andy_ wrote: »

The issues are probably age and lack of credit history.
Don't pay much attention to the Experian scores etc as each lender scores differently.

It'll also be access to other credit, income etc. It's often down to a ratio of what you earn against what you owe, or rather want to owe. You'll be going some to get the 8% they advertise, you'll normally see *Typical beside it meaning they can charge you something else; and probably will!

If you can save, then do so.

naijapower

Tesco loans search Equifax as far as i am aware. You may wish to view your Equifax report as well ...just in case

rodgers

Thanks for the replys.

Yeah I can save and is what I'm currently doing. I reckon by middle of next year I will have enough money. The idea to get a loan was just down to me getting a bit fed up with my car at the moment and wanting a new car sooner...

Oh well I'm sure I can manage with my car for a while. I suppose it's the banks choice if they don't want my money?!

How do I get a good credit history if I can't even get some kind of credit card now?

naijapower

As for getting credit if the purpose is to build up a history, you may wish to consider cards like Capital One and Aqua. They are useful for building history though rates can be high

rodgers

Should I wait a while before applying for a credit card as I've applied for 2 and a loan this week. Or will it not matter too much if at all?

marmitedog

What do you mean by "changed your overdraft"?

If you mean got the bank to reduce your limit, then that will help in future.

If you mean you have paid some of it back, then this will be the source of some of your problems. Overdraft = living beyond your means either now or some point in the past.

rodgers

I have an overdraft facility with Nationwide. Which when I checked was set at £950. I've used it in the past either by accident or on purpose but I do keep a close check on what I can afford. I'd say I've probably used it 4-5 times in the last few years. I've reduced my limit to £300 just in case but in a couple of months after I've built up a saving buffer I'll reduce it to £0 as I don't need one.

rodgers

I'll add to that I didn't realise using my overdraft was a bad thing, If I knew that I wouldn't have bothered in the past as I never been in a situation where I've really needed to. I only used it by buying things before I've been paid and stuff like that which I didn't need to do and could have been avoided.

Thanks for the replies :T