Loan Refusal Quandary

Cadman_2

My Wife & i have been refused 3 loans applications in a row (DirectLine, GE Money & Abbey) for the sum of £22K over 60 months. All of the loan compamies have stated that the reason for refisal was because of our credit score.

After DirectLine refused (1st application) we both logged onto Experian's web site & obtained our credit report. My report had a score of 923 out of 1000 & was GOOD, my wifes was 999 out of 1000 & was EXCELLENT.

We have on each occasion written to the individual company & asked them to re-evaluate or explain further & each time they have come back NO with the same excuse.

Also in each application we have elected not to take their PPI out as we wish to obtain from another company.

The loan is to pay off existing credit card debts over a 5 year period.

our income is as follows £31850 (self) & £14400 (wife)
outgoings -
Mortgage £268/month (£27950 left over 11 years)
Car loan £266/month (39 months left)
Childcare £260/month
Council Tax £82/month
Gas/Electricity £118/month
etc...

Can anybody please suggest the next step for us or is it just a case of going to our Bank & getting a loan with them at a higher interest rate?

Thanks in anticipation

fabbers

Experian aren't the only credit checking agency, you'd be wise to check equifax as well, they can have quite conflicting details in them as i found out a few years ago when i was refused a loan.

In my case it was a mistake on the Experian credit file that listed a defaulted direct debit that had never even been billed to me for a mobile phone contract i'd never taken out. I got this removed after several letters to the companies involved but it didn't even show up on the equifax report.

enjoyincubus

remember that the equifax score will either form a part of the credit scorecard, or may not even be used at all, so you can't go purely on this. However it should give you an indicative idea of your credit worthiness, although this all depends upon the individual lender and how they measure risk.

Other questions that are likely to be on the lenders scorecard are:

- Marital Status
- Home Ownership Status
- Length of Residence
- Are you on the Electoral Roll?
- Have you ever defaulted or missed a payment in the last six years. Or do you have any CCJ's or bankruptcys?
- How much you are applying for etc

I am sure there are more, but those are off the top of my head!

Make sure you are telling the lender that you are planning to use the loan for debt consolidation, otherwise they may think you are stretching yourself financially.

If you don't mind me asking, how long have you been at your address and are you on the electoral roll? That can usually cause you to be declined if they can't prove you live at the address.

Cadman_2

enjoyincubus wrote:

remember that the equifax score will either form a part of the credit scorecard, or may not even be used at all, so you can't go purely on this. However it should give you an indicative idea of your credit worthiness, although this all depends upon the individual lender and how they measure risk.

Other questions that are likely to be on the lenders scorecard are:

- Marital Status
- Home Ownership Status
- Length of Residence
- Are you on the Electoral Roll?
- Have you ever defaulted or missed a payment in the last six years. Or do you have any CCJ's or bankruptcys?
- How much you are applying for etc

I am sure there are more, but those are off the top of my head!

Make sure you are telling the lender that you are planning to use the loan for debt consolidation, otherwise they may think you are stretching yourself financially.

If you don't mind me asking, how long have you been at your address and are you on the electoral roll? That can usually cause you to be declined if they can't prove you live at the address.

Thanks for the reply

we have been here 14 years now. We have explained to the companies contacted that we are debt consolidating, but it didn't seem to make any difference!

Cadman_2

fabbers wrote:

Experian aren't the only credit checking agency, you'd be wise to check equifax as well, they can have quite conflicting details in them as i found out a few years ago when i was refused a loan.

In my case it was a mistake on the Experian credit file that listed a defaulted direct debit that had never even been billed to me for a mobile phone contract i'd never taken out. I got this removed after several letters to the companies involved but it didn't even show up on the equifax report.

thanks, will look into it

regularsaver1

was it anything to do with affordability instead??

Cadman_2

regularsaver1 wrote:

was it anything to do with affordability instead??

Thanks for the response...............

But if that is the case why don't they just cite that as the reason rather than using the credit score as the reason?

jamesd

zopa.com might - debt consolidation is the reason for almost half of all their loans. Note that rates vary with the amount borrowed, so you may want to experiment to find the best balance of rate and amount if you're possibly interested in more than 8-10,000.

chani1

i sell loans and to advise there are many factors in applying for a loan not just credit score(which yours is good) the main ones are -time at address the longer the better. income and expenditure they take your wages per month and deduct expenditures if i was you i wouldn't include child care cost as if one of you was off work you wouldn't need to pay this (its not classed as essential). Also believe it or not time you have been in your current job aswell. No matter what the advisor implies taking insurance(ppi) on the loan or not has no effect on the outcome of the loan, However just to advise that your credit score goes down every time you apply for credit, more than 1/2 searches within a space of 3 months can have a negative effect however every 3 months you don't apply for credit it goes up so my advice is to wait 3 months then try again.hope it makes sense and is useful.

Cadman_2

chani1 wrote:

i sell loans and to advise there are many factors in applying for a loan not just credit score(which yours is good) the main ones are -time at address the longer the better. income and expenditure they take your wages per month and deduct expenditures if i was you i wouldn't include child care cost as if one of you was off work you wouldn't need to pay this (its not classed as essential). Also believe it or not time you have been in your current job aswell. No matter what the advisor implies taking insurance(ppi) on the loan or not has no effect on the outcome of the loan, However just to advise that your credit score goes down every time you apply for credit, more than 1/2 searches within a space of 3 months can have a negative effect however every 3 months you don't apply for credit it goes up so my advice is to wait 3 months then try again.hope it makes sense and is useful.

Thanks for the advice.

Cadman_2

Many thanks