Turned down for a loan

munichowl

This is my 1st post so please go easy!
I recently applied for a loan from my bank and was turned down. I have an experian credit score of 950, however about 2 years ago i ended up in difficulties with paying an o/d due to divorce/ ill health and i have 8 missed payments against my name. I subsequently have repaid all i owe in full (March 2009). I have no mortgage, i pay off all my credit card in full every month, my take home every month is fairly substantial (I am an IT contractor). I had never been in difficulties prior to that period.

I had recently talked to my bank branch about the possibility of a mortgage later this year, and they said that would not be a problem, so when i appled for a relatively small loan - i was a little surprised to be turned down by an online application.

I called my branch, they have arranged a meeting - and seem to suggest they will overrride the automated process, so maybe no problems.

But regarding the automated refusal and the missed payments, the bank has suggested that i can apply to the courts to get these 8 missed payments removed. has anyone come across this process? is it likely to succeed? how do i go about it?

Many thanks any constructive advice (yes i know i was an idiot to miss those payments - but sometimes life kicks you where it hurts !)

paulmcerlean

The branch may be able to override instant decisions made online by the means of manually underwriting the loan, however with 8 missed payments on your credit file, you will find it extremely hard to get any kind of credit via the means of computerised decision.

People with one missed payment are struggling such is the strictness in lending recently thanks to the state of our country.

milliemonster

I can't understand why the bank told you to apply to the courts for the missed payments to be removed from your credit file, it would have been your bank who applied the markers to your credit file for missed payments, not the court so the only people able to remove them would be your bank!

In my experience, banks make all sorts of promises but still perform a credit check for borrowing at the end of the day and most likely will still refuse based on the number of missed payments. Have they explained to you the reason for the refusal? was it because of the missed payments or something else on your credit file you don't know about?

skintdragon

I would be weary of what the bank says, because if you've already been declined, the appeal process will incur another credit check. I am only speaking from personal experience, so I might be wrong!

munichowl

The only thing on my file is the 8 missed payments. This seems to be the reason for the decline.
I to am confused why the bank cant remove the missed payments, at the end of the day it was my actions that resulted in the missed paymentsm but the marker is due to them.
I have been told that these missed payments will remove themselves naturally after 7 years!!!! Great!
In other words 7 years of 'bad' credit.

If anyone has any advice on how to tackle this - gratefully received!

Tixy

A court could not remove the missed payment markers.

Were the missed payments with the same bank? it is just possible that they may decide to override the computer decision and allow for the loan, but the person you spoke to sounds fairly clueless with what they suggest regarding court & missed payments so I would talk it through with someone who does seem to know what they are talking about before you allow another application to be processed (resulting in a further search of your credit report).

Do you also have a default? (its likely after 8missed payments that there would be a default on the account). If so check that this is marked as satisfied on you report. Satisfied is better than unsatisfied but even so it will seriously hamper any chance you have of getting new credit for the next few years.

What existing credit do you have now? You mention a credit card - does it have a high limit? are any of your paid off accounts still open/active?

munichowl

The payments were all with the same bank. The limit on the card is not high about 2k. All non-open accounts show satisfied. There are no defaults - it looks like i just managed to avoid that! All my accounts show as Satisfactory, though there are 2 accounts that i thought were closed a year ago that do not show as settled! I gave no CCJs

munichowl

Does this mean that there is no way round this problem? Is it possible to get these missed payments markers removed? Or do i have to live with this for a period of time?
Are there loan/mortgage companies that I can appraoch that will deal with this history?
Or am i basically stuffed for the forseable future?

ILW

Missed and late payments are a matter of fact, unless you can dispute that they actually happened then there is no case for getting them removed.

munichowl

Does this mean that I am stuck with this situation for a period of time?
If i paid the outstanding debt in full in March 2009, how long will this stay on my record?

Are there loan/mortgage companies that I can appraoch that will deal with this history?
Or am i basically stuffed for the forseable future?

bouncydog1

Start off with your bank - see somebody experienced in lending and go and talk it through.

A mortgage is secured on the property so the bank has security if you don't pay, albeit you may not get the best rates because of your payment history.

As others have said, missed payments are a matter of fact. The bank provides the information to the credit agencies so that other lenders can assess how good a risk you will be if you apply to them to borrow money. Clearly if you haven't missed any payments since and continue to make sure that everything is always paid on time, this will show that your credit history is improving.

However the only way that the bank would be able to remove the markers from your file is by advising the credit reference agency and I believe they would only do that if they had made an error e.g. you made the payments and they allocated them in error to another account.

I'm afraid that if you missed the payments the hard fact is that they will remain on your file for the 6 year duration.