Who are the best lenders for loans at the moment?

crinklesc

Hi,

I wonder if anyone can help us. We have an above average credit rating, around 650 our of 1000 depending on which day you look and with which agency. Saying that this has dropped from 750-800 sinice the credit crunch for no apparent reason other than we have 2 credit cards that we use for emergency purposes since we travel overseas alot, they have high limits and we only ever use about 20% of it paying off monthly. Apparently these days if you have a high credit limit but don't use it all this lowers your score..madness!

Anyway to get back to my original point, we are struggling to get approved by any lenders at the moment, so far been turned down by Tesco and RBS and we don't want to keep making applications as this will just reduce our credit rating further. Does anyone have any experience of who is lending well at the moment and who we may have some success with?

Beast

Your 'credit score' means nothing - it's simply a way for the credit agency to generate some revenue. Please do not pay attention to this.

What does your actual credit report say about you? Any defaults or missed payments? On the electoral register? Existing debts?

crinklesc

Yep we have existing debt but only our mortgage. We have credit agreements with things like Next, BT, Eon, TV licencing etc but all are ok and no missed payments and yes we are on the electoral roll. It really is mindless, we have a very low mortgage repayment, more than enough salary between my husband and I and a good credit history. We just can't understand why we keep getting refused.

Tixy

Your high credit limits on the cards are likely to be a contributing factor.
In addition to your credit report history banks also look at your debt to income ratio and your credit to income ratio. If you have high credit limits these will be affecting the latter.
How much credit do you have in total across all accounts, how much do you earn?
How much do you want to borrow?
When you add your new desired borrowing to existing credit what credit to income ratio does that work out as?

CLAPTON

how much do you want to borrow
how much do you earn

crinklesc

So far we have applied in my husbands name only:

Earnings (gross)
- £35000/annum
Borrowings
- £0 (credit card - limit of £5,000)

Me:
Earnings (gross)
- £55,000/annum
Borrowings
- £174,000 (mortgage - payment £174/mth)
- £1,000 (credit card - limit of £7,500)
- £10,000 (car loan - payment £179/mth)

crinklesc

Sorry, also meant to say that we are looking for a loan of minimum £17k over a 5 year period and it is for a car purchase

Tixy

£17k plus the £5k on the card will put your husband at 63% unsecured credit to income. Its currently pretty hard to get new lenders to approve much above 50% so this may well be why you are being refused.

He could consider thinking of an HP secured on the car, or he could reduce his card limit down to say only £1k and then try again in 6weeks or so (after his report will have been updated).
Or he could try to borrow less, which could then be more likely to be approved, although obviously the 2 existing applications make it advisable that he keeps any future ones in the next few months to a minimum.

CLAPTON

borrowing of 17k on a salary of 35k is very high and may well be the reason for the refusal if the application was made on his sole income.

and frankly even on a combined income of 90k non mortgage borrowing of 28k is frightening