Lloyds, the good, the mad, and the ...

6bar

hi,

i've been resident in the UK for just under two years, have banked with Lloyds for almost the same amount of time and have a good record on account conduct, am in full time stable employment, and have an unblemished credit report with an average credit score (no previous UK credit history seems to be a key factor affecting this score)

about 6 months ago staff in my local branch of Lloyds recommended i apply for a credit card as a way to accelerate improvement of my credit score. From that initial visit and every month since, i've been back to the branch to go through the credit card application process only to have the system reject it on each occasion. This has been to the growing frustration of staff in the local branch and myself because it was never clear to any of us why the application was being turned down. In my last visit, this process culminated with a 15 minute phone call between the branch manager and back office staff, at the end of which the best explanation offered from back office was along the lines of 'the application was rejected because the computer didn't accept it'. Somewhat embarrassed at futility of this response, the manager then immediately proceeded to hand write a letter in my name appealing the decision

I received a polite but utterly useless written response from Lloyds a couple of weeks later - an excerpt of which follows :

'I regret that I am unable to give you a specific reason as to why your application did not successfully pass our credit score on this occasion. The scoring system takes into account a number of factors such as a customer's income, employment details, existing borrowing and residential circumstances including length of time at each address lived at. The bank will also conduct a search at credit reference agencies.

For business reasons the bank does not divulge the way in which our system calculates a decision, although a combination of factors such as those I have mentioned contribute to the final result.

I understand that this decision will be a disappointment to you, but you would be welcome to reapply in six months time.'

what gives with that ?, no indication of what the specific problems are, or any advice on what steps i should/shouldn't take to advance/regress the situation. Not sure where to go with this next, i'd like to understand what the exact issues are but i guess there is no binding obligation on Lloyds to provide me with specific reasons ?, i'll probably need to take the matter up with Customer Relations

i couldn't be happier with the level of service i get from staff in my local branch of Lloyds. The frustrating thing is that experiences like this do nothing short of make a complete farce of the effort invested by branch staff in customer relations. If this is indeed an accurate portrayal of the closedness and inflexibility of Lloyds back office processes, then at the end of the day there seems little better option than to take my business to another bank where they take customer service seriously.

thanks for taking the time to read, any thoughts and opinions appreciated

Tixy

Hi

That is a standard reply, and it is very rare for anyone to get anything more specific to explain the reasoning behind a decline.

However if you have applied for the card every month for 6months and a credit search has been applied each time this is not good news in terms of your credit report. In fact I am amazed that the bank suggested it.

If Lloyds won't accept you then the best bet to try to increase your credit score would be to get a subprime card - they have high interest rates so you need to pay it off in full each month so you never pay any interest - read this article for information - http://www.moneysavingexpert.com/cards/bad-credit-credit-cards

Are you on the electoral roll? have you requested a copy of your credit report from experian & equifax to see what is showing now?

jonesMUFCforever

You have not been resident 3 years - purely and simply that will be the reason you have no been declined.
The banks change their lending criteria on a regular basis.

6bar

Tixy:

thanks for your advice, only wish i'd had the good sense to ask for it 6 months ago instead of having worked most of this out the difficult way myself

i did subscribe to Lloyds ID Aware service for a couple of months (just a Lloyds branded portal around the services of some credit checking agency, i don't recall which one). As far as the ID Aware online documentation stated, one's credit score is pretty well independent of the frequency of credit checks, although each and every check made is logged in the credit report. I'd think one or two credit checks per month shouldn't be seen as unusual (particularly when services like ID Aware provide the user with unlimited free credit checks), this makes for quite a different behavioral pattern than that associated with the wholesale spree of credit checks that might arise from more dubious attempts to get credit. Because there is much of online material biased either way on the impact of the frequency of credit checks, i'm not sure what to believe to be honest (is there anything definitive on this subject ?) -- however, i find it difficult to comprehend the logic that would characterise credit checks at a frequency of one or two per month as suspicious, detrimental or otherwise bad behavior.

to answer your questions, i'm on the electoral role, and have taken a subprime credit card with Capital One, but as that was only two months ago it hasn't yet had a positive impact on my credit score. The last credit score i got before canceling ID Aware was 607 out of 999 on 2010.02.21.

i'm still interested in getting a Lloyds credit card, but for me the more important question now is about how much value Lloyds really places in customer relations. In an ideal world, i want to do business with a bank i can negotiate with, one that give me useful advice, and most importantly one that can is open and honest in reason it makes the decisions it does. Ok, that is probably too much to realistically expect, but on account of my experience so far, i score Lloyds back office services a zero on all counts.


jonesMUFCforever:

thanks for the tip, would you have any pointers to further evidence of such a policy ?, is it Lloyds specific ?. My partner has been resident in the UK a month longer than i have (23 months), and she was offered a credit card by HSBC this janurary. Somewhat ironically, i moved to Lloyds as a result of appalling experiences suffered under HSBC to begin with, but that is another story.

opinions4u

6bar wrote: »

about 6 months ago staff in my local branch of Lloyds recommended i apply for a credit card as a way to accelerate improvement of my credit score.

While there may be accuracy in the comment that a well maintained credit card will improve a credit rating, it's a sales pitch. They want to flog you a credit card because they get paid more if they succeed.

From that initial visit and every month since, i've been back to the branch to go through the credit card application process only to have the system reject it on each occasion.

Multiple credit checks can damage your credit rating. Stop doing this.

This has been to the growing frustration of staff in the local branch and myself because it was never clear to any of us why the application was being turned down.

If they gave a specific reason (e.g. you've only been in your job 2 years, but if it had been 5 years you'd have scored an extra 30 points and qualify for the card) people would re-apply and lie about things.

In my last visit, this process culminated with a 15 minute phone call between the branch manager and back office staff, at the end of which the best explanation offered from back office was along the lines of 'the application was rejected because the computer didn't accept it'.

Computer says no. It's not a decision the branch staff or manager have any control over.

Somewhat embarrassed at futility of this response, the manager then immediately proceeded to hand write a letter in my name appealing the decision

If the appeal is successful, the manager earns more money.

I received a polite but utterly useless written response from Lloyds a couple of weeks later - an excerpt of which follows :

'I regret that I am unable to give you a specific reason as to why your application did not successfully pass our credit score on this occasion. The scoring system takes into account a number of factors such as a customer's income, employment details, existing borrowing and residential circumstances including length of time at each address lived at. The bank will also conduct a search at credit reference agencies.

It is a totally accurate response. If they gave you specifics it would render their scoring systems useless and expose the bank to significant risk of new losses on the credit cards it issues.

I understand that this decision will be a disappointment to you, but you would be welcome to reapply in six months time.'

Not every month. Time to be patient.

what gives with that ?, no indication of what the specific problems are, or any advice on what steps i should/shouldn't take to advance/regress the situation. Not sure where to go with this next, i'd like to understand what the exact issues are but i guess there is no binding obligation on Lloyds to provide me with specific reasons ?, i'll probably need to take the matter up with Customer Relations

Customer relations cannot force the credit card arm of the bank to lend. It's also not worth taking things to the Ombudsman because he also cannot force a bank to extend credit where it doesn't want to.

i couldn't be happier with the level of service i get from staff in my local branch of Lloyds. The frustrating thing is that experiences like this do nothing short of make a complete farce of the effort invested by branch staff in customer relations. If this is indeed an accurate portrayal of the closedness and inflexibility of Lloyds back office processes, then at the end of the day there seems little better option than to take my business to another bank where they take customer service seriously.

You won't find many banks offering credit to people with residency of less than 3 years. I'd continue to build on my exisiting relationship with LTSB if I was in your position. Keeping chopping and changing banks won't improve things.

In an ideal world, i want to do business with a bank i can negotiate with

Ideal worlds don't exist.

Tixy

6bar wrote: »

Tixy:

As far as the ID Aware online documentation stated, one's credit score is pretty well independent of the frequency of credit checks
maybe the score given by 'id aware' does not take into account the number of credit searches done, but lenders certainly do when they look at your credit report.

, although each and every check made is logged in the credit report. I'd think one or two credit checks per month shouldn't be seen as unusual (particularly when services like ID Aware provide the user with unlimited free credit checks), this makes for quite a different behavioral pattern than that associated with the wholesale spree of credit checks that might arise from more dubious attempts to get credit. Because there is much of online material biased either way on the impact of the frequency of credit checks, i'm not sure what to believe to be honest (is there anything definitive on this subject ?) -- however, i find it difficult to comprehend the logic that would characterise credit checks at a frequency of one or two per month as suspicious, detrimental or otherwise bad behavior.

Its usually recommend to have no more than 3 credit checks in any 6month period. Each time you have a credit application it appears on your report and having a lot close together makes you look desperate for credit. Doing a personal check on yourself does not have the same impact which is why services offer unlimited access to your report.

to answer your questions, i'm on the electoral role, and have taken a subprime credit card with Capital One, but as that was only two months ago it hasn't yet had a positive impact on my credit score. The last credit score i got before canceling ID Aware was 607 out of 999 on 2010.02.21.

I wouldn't recommend paying much attention to any credit 'score' the important thing is what is on your credit report with the 3 credit reference agencies (experian, equifax, callcredit), that is what lenders see when the do a credit search not a number.

i'm still interested in getting a Lloyds credit card, but for me the more important question now is about how much value Lloyds really places in customer relations. In an ideal world, i want to do business with a bank i can negotiate with, one that give me useful advice, and most importantly one that can is open and honest in reason it makes the decisions it does. Ok, that is probably too much to realistically expect, but on account of my experience so far, i score Lloyds back office services a zero on all counts.
Thats just not how things work I'm afraid

Why do you particularly want a Lloyds card?

ICan'tStandIt

6bar wrote: »

hi,

i've been resident in the UK for just under two years, have banked with Lloyds for almost the same amount of time and have a good record on account conduct, am in full time stable employment, and have an unblemished credit report with an average credit score (no previous UK credit history seems to be a key factor affecting this score)

about 6 months ago staff in my local branch of Lloyds recommended i apply for a credit card as a way to accelerate improvement of my credit score.

I work in collections for a major bank and about 30% of the people on our bad debt book are foreign nationals, so they are probably taking this into consideration when processing your application.

Foreign nationals can be a higher credit risk partly down to the fact that it's not always possible to be sure how long they will be in the UK for. If you're here on a visa of some kind and that visa does not get extended, then it's perfectly possible that you might have to return to your home country whilst in debt to a UK bank.

Personally I don't think that foreign nationals should be allowed to borrow money from UK banks (unless there are very tight controls) as it just causes too much hassle in trying to get it back.

An overseas mortgage where thorough checks are done is one thing, but giving the likes of Polski Pete a credit card is a bad idea.