Refused twice for a loan

lewisgg

Hi All,
Having been self employed for the last 3 years I've run up debts on two credit cards, one with HSBC (£3000) and one with Virgin (£2000). Both are just under the credit limit. I've never missed payments or anything like that.
I've just started a better paying job (£21k). Im really keen to go debt free in 2 years, while enjoying being 21! I have a car temporarily but it's 15 years old, and is badly in need of an upgrade.
My plan is to get a used car for around £2000 that should be more reliable for work etc. So I had the bright idea of applying for a loan for £7000 over 2 years to both pay off the credit cards (both around 20% apr) and buy a car. Well that was the theory. However I have been refused twice now for a loan by two different companies. My monthly outgoings are low - I still live with my parents. And I have used the Experian credit check which tells me my score is 913 which seems pretty good to me.

What am I doing wrong?
Any help or advice much appreciated.

Malky

Your ratio of debt to earnings may be too high if you take on a £7K loan on top of your existing £5K debts against your £21K earnings. Most lenders will look at the £12K total debt and will have no guarantee that you will pay off your credit cards.

lewisgg

thats good feedback, thanks malky.
is there anything I can do about that then?

jonesMUFCforever

Have you tried your own bank?

If you have and they have refused then you may have to wait 2 - 3 months whilst you build up a behavioural score with the bank.

immoral_angeluk

Also did you put living with parents on your application? How recently did you start your new job? Both are things deemed as high risk to lenders which won't appear on a credit check.

lewisgg

Yeah, just started my new job 6 weeks ago, and yeah I did put down I live with my parents....