Help please...

NGlady

Hey all

I wonder if I could have some helpful advise. I have never really looked into Loans before (Maybe this is the wrong board for this) but I applied for a loan quote last weekend with Lloyds and I was refused. I was not applying for a huge loan, just £2000.

I was quite suprised, because on the face of it I would say I am an ideal candidate for a loan. I earn a basic Salary of 1k a month along with most months an extra £300 commision. I have minimum out goings, of £130 to my parents, £100 on some credit card debt (£1300! I know.. I am getting charged a largeish interest of £20 a month, so was wanting to get a loan and pay off in a year!) The extra £700 was to pay for car insurance. Then I also have to pay
£100 per month in work related costs. So I have normally have a very good disposable income.

Anyway, I was told to obtain a copy of my credit record so I did via Experian. This has allowed me to come to one of a couple of conclusions ref my refusal.

One being - I seem to have a lot of "available" credit to me.

I have two credit cards -

One with £210 on it with Virgin which I am waiting until Payday then I can afford to pay off in full. The credit limit is £500 though.

One with Halifax - £1300 on the card, but a credit limit of £3350. Why Oh Why do they decide to increase peoples limits without permission!!

Then I have with catalogue companies:

I have zero balance - but £300 available with la redoute.


Also I seem to have two next accounts. Interestingly, they decide to put you in an account when you order. And even one of my "accounts" is spelt with the wrong surname! so total available £550


Additions catalogue - £1100 available, was £300 once upon a time. With zero balance

I have with store cards:

Ikano finance - now zero balance but £250 limit
Santander - 2 cards.. total limit £600 - no balances.
creation finance - think it was a once upon a time purchase in Faith, £0 balance and £200 limit

Bank accounts:
Halifax current account - £250 overdraft. I thought I had cancelled this, but it is still there.



For a long time, I have made the mistake (I know... I know.. NOW) of minimum payments on credit cards. Something I need to rectify hence paying Virgin off on Payday. But other than that, I think I have had a couple of late payment things this year with an Oasis card which is now zero. A friend of mine suggested that I use catalogues/cards for minimum purchases and make a point of getting them paid straight off in order to create a financial history for me. I remember a teacher once telling me he was refused a mortgage cos he had never had credit, so he went and brought a toaster, and paid over a couple of months on time every time to get a credit trail.


Another friend suggested I write to all the credit companies telling them to reduce my credit limits to negligable amounts so I have more "money available to me"


Another conclusion I have come to is that: I have only been in my job for 4 months, does that make a difference? And before that unemployed for about 7 months.

Also before my parents moved into this property, there was a man with the same surname. I have a very very common surname. Who is up to his teeth in debt using multiple personas. I think this may have had a trace on me?


I don't particually need the loan NOW and I am happy to try and pay my credit card off whilst paying interest if need be, but I just don't see it as worth while :S It will be tight but I should be able to pay the card off in 4 months, but this will probably mean hardly any savings

Can I have some practical easy to follow advise please? I am only in my very early 20s now, but im worried about 8yrs time when it comes to a mortgage where I will stand with all of this.

I am not really in a position to be asking for a loan from family, so that isn't even an option for me.


Help!!!

Thank you in advance.

Beast

I may be missing something but it looks like you have almost £1,000 a month disposable income so why not just pay off the credit cards and save your car insurance next month?

masterlumps

i kind of thought that as i was readin it as well, if you have 1k left over every month why on earth would you want to get tied into a loan cosing you money

NGlady

Well the £300 isnt guranteed - and out of my 1k I obviously have living costs as per the above, also I do still want to have a life for the next 6 months.

The question was more in relation to the "why cant i" get a loan aspect?

chesky369

Why do you WANT a loan?

Emmzi

I think you have said it all yourself
- 4 months is not a solid employment history
- 1k a month income is relatively low
- no g'tee your expenditure won't go up (what if your dad threw you out?)
- current debt is 1.5 times your take home pay, new loan makes it 3.5 times - bit on the high side
- no g'tee you wont go mad an use all your available credit

I'd save.

NGlady

So would it be an idea to get all my creditors who have got balances there for me to remove them thus reducing the risk of me going mad?

CLAPTON

you have a very low wage
you have recent missed payments
you regularly only pay the minimum on your cards
you want to have a life rather than become debt free

you are a relative high risk customer

concentrate on NEVER NEVER EVER being late with a payment
pay off the debts asap
then use a credit card regularly for things you anyway buy (petrol say) and pay in full each month (set up a DD so you are never late and never forget)
then start saving some money so you never need to be in debt (except in the future for a mortgage)

NGlady

Theres a difference between wanting to spend every penny on a social life and between having a spare few quid to have a laugh with friends and wanting to bite into my debt. How can people honestly, have NO social life? Never understood it to be honest. I do have some savings

CLAPTON

NGlady wrote: »

Theres a difference between wanting to spend every penny on a social life and between having a spare few quid to have a laugh with friends and wanting to bite into my debt. How can people honestly, have NO social life? Never understood it to be honest. I do have some savings

if you have saving then use them to pay off your debts... you are earning say 2% on your savings and paying 20% on your debts

with reasonable money management you should be able to have savings, no debts and a social life

in any event I'm explaining why you were not a lender dream but in reality are rather a high risk person

its for you to get the balance right, but living at home should give you the opportunity to save up a reasonable sum... otherwise what would you do if you wanted to move out to a place of your own?

plum44_2

Very wise advice Clapton.