Why do I keep failing credit checks?

handsomechap

Hello all, I've lurked here for a long time but now I need some advice, here's my situation:

I want to get a new car, got a few grand saved, but I want to get a 3-4 grand loan to cover the rest. My problem is, I've applied for 2 loans now and been turned down due to failing credit checks. I have signed up to both experian and equifax to see whats the issue.

As a little background, I'm 26, married with a baby boy, own a mortgaged house, been paying mortgage for last 2.5 years absolutely zero late payments, prior to that I was renting so this is my only mortgage history. I'm on the electoral roll, I have lived at this address 1.8years, last address 8 months, prior address 2 years.

I have been working full time for the same employer for the last 4 years, I have 1 joint bank account with my wife, opened 3 years ago, receives my salary so its always fine, 1 credit card opened a couple of years ago which gets used for purchases quite often but is always paid off, no late payments, etc, have 2 current phone contracts which have been paid off perfectly every month for the last 4 months/12 months, 1 next store card that gets paid off each month, 1 loan argeement through dfs sofas for the last 2 years which has been paid off without fail.

Now for the bad bits:

4 years ago I got myself into trouble, I had an RBS student account which, when I left university they wanted to reduce my overdraft from 3 grand to 1.5 grand and were trying to get me to pay off £250 every month, I had only a part time job and couldn't afford to repay anything really, nevermind £250, and after failing to get their money for several months in a row, the account was closed and they sent a debt collection letter to me for the balance, which I paid as I got a job at the same time who kindly loaned it to me out of future salary. This account is on my equifax record, and the end is marked with several overdue payments and then a delinquant mark then a settled mark.

2 years ago orange kept trying to bill an expired debit card even though every month I phoned up and paid and updated my card details at the same time, this kept giving me late payment reminders that I can still see on the experian website, I cancelled my contract with orange in the end as it just kept happening month on month. This is recorded on my experian report as several months of overdue payments then a settled.

So both experian and equifax record one 'negative' against me as far as I can see, I have lots of positives such as a lot of records of only perfect payments within the last 3 years, all my data is filled in correctly and present such as addresses, etc, experian gives me a summary saying that I am using 25% of my total credit, whether that has any bearing I dont know, the only other things I can see are I have a relatively high amount (I think it might be high anyway?) of linked properties on experian, it links 7 properties which are the house I own, the 2 prior where I rented for 1+years each time, 3 houses I lived in during university, and finally my parents address before that. I have 3 linked people, all my wife but under her married name, maiden name, and maiden name with a middle letter, no idea if this matters.

All the negatives were on my records when I applied for a mortgage, credit card, and loan through dfs for sofas, none affected them and in the meantime I have built up what I think is a much better record now. Nonetheless I have now failed on 2 loans, am wary of getting more checks on my records, is it because times are causing lending to be that much stricter now?

Don't know what to do as I can't really work out why I'm failing

nzseries1

The overdue payments and delinquency mark will have a negative effect, but as you say you had those there initially. I would say it's lenders being more strict these days. I've seen quite a few reports of people on here saying it was no problem to get credit, and now they can't. I myself have been getting turned down for credit cards whereas at the start of last year it was easy enough to get accepted for anything.

Of course, it's impossible to call your exact situation, because only the banks and finance companies know for sure. Did you try and actually ask one of the companies that turned you down for a reason? They often won't give anything other than a generic reason, but you never know unless you ask.

Joeler

Did you apply through your bank? This would be the best bet to try if you haven't already, however maybe wait a while now you've been turned down twice.

Second part is affordibility. No matter how good your credit rating, if you earn 25k a year for example, and have 5k of other credit commitments as well as a mortgage, asking for another 3-4k could well put you over what lenders would deem to be affordable for you.

If you can wait and save for it all the better, but if you're anything like me you will want it now!!!

Either way best of luck

anniecave

do you really need the bigger car? can you get something a bit older or smaller and cheaper?

I'd agree lenders are being picky. Also several credit applications in a short space of time can also be a problem.