why can't i get a loan???

Jax86

hi everyone - right, i'm new to this so i'm hoping someone can help me!

Here's my situation:

I'm 24 and living at home with my parents but they're getting a divorce! my dad is moving away and my mum can't afford a place for her, my two younger bro's and me, so basically i have to find somewhere to live!

Here's the problem:

I have credit card debts of just over 7K and a loan with £3,700 with 3yrs left to pay.
I've never missed a payment, i work full time with a salary of just over £22k and always pay more than the minimum amount for all my cards.

I've done the whole credit tart thing but in order to move out it would be so much easier to have one monthly payment!

I asked to increase my loan to pay off my cards but got declined due to my credit score (which by the way is the top score it can be!).

So i reduced all credit limits on the cards i have, closed down a card i no longer use and left it 5 months. Re-applied to get a different loan to cover my current loan and cards...still got declined on my credit score (which i've checked again and it's still the top score).

Sorry to ramble but i'm just totally confused as to why i can't seem to get a loan anywhere, even though i can afford monthly payments of up to £400 per month!

Is anyone else having this problem? I've been told i won't get a mortgage with a loan plus the 4 credit cards i have, which is why i was trying to just have the one loan! Now i've been declined i'm worried about what i'll have to do.
I can't rent as i have a dog and i've not found a single affordable rented property that allows pets! (He can't be re-homed before anyone asks as he's epileptic and i've been told he would have to be put down if i can't have him anymore )

Wow, this is a long message! I'll shut up now...please help!!

LeeSouthEast

Your credit score is meaningless, as each credit provider scores differently. The ones the credit agencies will 'sell' you are virtually useless.

You have a LOT of existing credit, and this, coupled with your salary and existing credit searches likely means you are considered to be (as a person) 'maxed out' and therefore a risk.

miss_missy

hi

well i dont want to sound harsh but you have just over 10k of debt already which isnt great when banks arent keen to lend and the problem with getting a loan to pay off debt is that the lenders dont know that you really will pay off your debt or wont run up the cc again

credit score means nothing its your history lenders are interested in also what is your top score 999?? ive read somewhere that this can be given if they cant score you at present someone else maybe able to confirm if this is true

now this could be the main point although reducing limits can be good it can also be bad if it looks like your close to your limits im not sure whats the best ratio to have someone else maybe able to advise on that but if your close to your limits your less likely to get more credit, you probably would have been better to have tried some shuffling with the cc rather than reducing limits

sorry for all the bad news but it doesnt look good at getting a loan and remember the more you apply the less likely you are to get one as you are messing your credit record up

Tixy

Hi Jax

Like the others, I'm sure you problem is the amount of existing debt and credit you have. Whilst you want a new loan to pay off your cards, for all a potential new lender knows you could simply blow the cash from the loan and then not be able to afford your existing debts and the repayments on your new loan. So from their point of view you are too high risk.

But as thats no help to you with your current problem the only other thing I could suggest is for you to complete a statement of affairs and then see whether there are areas of your spending where you can reduce your costs, either from money saving tips or simply by cutting down. If you post your statement of affairs (SoA) on here then people may be able to advise on other ways forward for you - http://www.makesenseofcards.com/soacalc.html

So will your Mother be renting a place with your brothers or buying a smaller place? If buying could you not agree to pay her a higher rent/board so that she can get a place large enough to accomodate a you and your dog, this would probably still be significantly cheaper than renting alone.

Don't totally give up on finding a rental place that willl accept pets - they do exist out there, i have friends who rent with pets, so do keep looking. Do you have any friends who have a spare room you could rent (perhaps someone who has over-stretched themselves financially and are now struggling - there are lots of people like that who have posted on here and we often recommend getting a logder).

Good luck

MrsTinks

I second Tixy's suggestion - if you can afford rent on your own then can't you pay that to help your mum afford a larger place? Whilst on paper you can affor the loan in your eyes then lenders see that you have pretty high debts compared to your income and that means they won't be keen to lend to you.

miss_missy - a score of 999 doesn't mean they can't score you... it means they can't find any faults or problems But even this doesn't mean that you are guaranteed a loan or credit card... I have one of the illusive 999 scores and I only look it up because it amuses me - not because I rely on it for getting an idea of how likely I am to get credit

OP - if you have already done 2-3 searches for credit recently then please don't do any more - it will reduce your credit worthyness - the more you search in a short period the more likely you will be turned down!

Jax86

Thanks for all the advice guys.

My mum is looking to buy with help from my nan for a deposit. She, like me, doesn't want to rent. I'll keep searching for rental properties allowing pets!

I have friends who are looking to rent but they all work in London and i can't afford the extra time and cost of petrol to get to work everyday from there.

I no longer use any credit cards and haven't done for months (they've all been cut up!). I did a budget plan so i only set aside money for work lunches, phone bill, petrol and just £50 for the whole month for going out and buying clothes or other luxuries. Every other penny goes to paying off my cards and the loan so i'm paying more than double the minimum payment each month.

Maybe i should just kip on the floor at my mums when she gets a place and pay off as much as i can so i can start saving properly to get a place of my own. As you have all said, i don't want to apply for anything else as it'll effect my credit rating.

I was just confused as the reason i was declined for both loans was because of my credit score. Hopefully by the time i'm 30 i will have paid everything off and may afford my own place with my boyfriend!

**the reason i got into debt in the first place was i applied for loads of ccards when i turned 18, got a car, spent more than i earnt on all inclusive holidays, clothes, going out etc as i was still at school doing A Levels (so only on a low part time weekend salary), now i'm still paying off the bills for it!) - STUPID GIRL!!! I had the talks from my parents, 'don't go getting yourself into debt and getting lots of cards' - didn't listen and now here i am at 24 still living at home because of it.

If anyone knows of a time machine available i'd love to rewind to when i was 18!!!!

Tixy

Jax86 wrote: »

If anyone knows of a time machine available i'd love to rewind to when i was 18!!!!

Hi Jax - wouldn't we all!! Except you can be pleased that you have realised the problems of easy credit and long term debts at 24, many of us on here were much older before we realised how much of a problem we had. The fact that you are tackling it now should mean your debts will be heading down from here on in.

Good luck

Jax86

Cheers! One thing's for sure, when i do eventually move out i'm never going to get into debt again!

By the way, does anyone know if you can actually close a credit card account even if you still have money to pay on it? I'm never going to use any of the credit cards i have so i'm simply paying them all off.

Tixy

You cannot close the account as such Jax, if your limit is a lot higher than your balance you could ask to reduce it.

However if they write to you to say you are increasing the APR on the account, you are then entitled to reject the new rate and continue to pay off the existing debt at the old rate (this in effect does close your account).