turned down for loan even tho perfect credit history

bellabeauty

Hi wondered if someone can shed some light on my question,
I applied for a unsecured personal loan, not a large amount (£3000). i have been told today that they have declined, thought mmmm thats weird... so thought id check my credit file with Experian, pleased to say its all A+, no defaults, late payments, CCJ's etc.... all satisfactory, does anyone know why they would decline on such a perfect credit history???? i am waiting for the letter from the bank to give me some sort of idea why they have refused, can wait....

Thanking you in advance
Bella

Tixy

Hi Bella

Do you have a lot of other debt already? or do you have a lot of unused credit available to you on credit cards/overdrafts/store cards etc?

They will compare both the amount of debt and the amount of unused credit to your salary to see whether they think you would be able to afford more credit on top.

Or could they have declined you because you don't have enough if a credit history for them to risk assess you?

bellabeauty

Hi Tixy

Nope no debts at all.... i have a credit card thats only half used (still have lots of credit on it) but isnt that a good thing, that i dont spend beyond my means! i only use my credit card in emergencies..... i have plenty of credit history, mortgage, current accounts, car finance (settled early) mobile phones etc all satisfactory paid.... its certainly boggled my mind as to why they have declined, cant wait for their letter, im very curious now.... i will let you know what it says ;-/
if i can not get credit with a perfect credit history, gawd help ppl who have a bad history!!!!!!!!

Tixy

Well whether having a lot of credit is a good thing depends on how much you have. If your credit limit on your card (and any other debts) is more than around half your income then they are less likely to lend in case you run up debt on the card as well as with them and end up struggling to afford all repayments.

davetrousers

bellabeauty wrote: »

Hi Tixy

Nope no debts at all.... i have a credit card thats only half used (still have lots of credit on it)

What does that mean? Do you mean you have a card with say a £2K limit and you have £1K on it?

bellabeauty

davetrousers...

Yes, credit card is 2,300 limit and spent 600, so thats not even spending half... maybe i should max it up, might improve my credit..... i havent got any other credit outstanding... only the mortgage, everything else has been settled.... i did notice that Next have given me credit of 600, i was sent a Next catalogue and phoned them and said i never requested it and sent it back, but its stating on my credit history that i have a next catalogue with a credit of 600....

Tixy

Well if your only credit is £2900 then thats not a lot (well unless you earn less than £10k)

Presumably the loan didn't mention a minimum salary criteria that you didn;t meet?

It might just be that you don't fit the lending criteria for this particular product. Wait and see if the letter says anything specific, then you could perhaps try somewhere else.

(You are not financially associated with anyone else according to your credit report are you?)

davetrousers

bellabeauty wrote: »

Nope no debts at all.... i have a credit card thats only half used (still have lots of credit on it)

bellabeauty wrote: »

Yes, credit card is 2,300 limit and spent 600, so thats not even spending half... maybe i should max it up.

Well you're £600 in debt. This is not massive and should be easily manageable. But don't kid yourself that you're not in debt.

OK moving on, you therefore have £1,700 of available credit on this card, which is roughly in line with what you want to borrow.

Silaqui

You said up there that everything else has been 'settled' if you did have debts but have only recently paid them off then that could be why you are being rejected, the information stays on your record for quite a while I think.