Sainsbury's Rejected Loan Application - Good Credit Rating?

jessicabuchanan

I've just been through a telephone application for a Sainsbury's Loan for £13,500.

Partially to buy a car, partially to consolidate debts. I'm earning £36k/year, own a house and have only £2k debt on credit cards. My partner is also paying £500/month into my account - which they didn't ask.


They didn't even ask how long I wished to spread it over before rejecting me (which is only 2 years) :wall:. I've checked my credit rating;

• 885/1000,
• Never defaulted on any payments

I applied for a Tesco Credit Card which they rejected me for last year (December) so I wrote and asked why with a copy of my credit report. This meant they approved the card with £1k limit, which was fine.

Does anyone know firstly why they may have rejected me and 2ndly if what I did to Tesco might help in this case? I just really don't want rejected loan applications on my credit rating etc.

Can anyone advise me on how to take this further, as now I'm reluctant to apply again!

kerri_gt

Firstly, if you check a number of other posts, the numeric credit rating score counts for zilch, it's just a number credit rating compaies use but all financial institutions set their own criteria so it counts for nothing. There have been a number of posts recently about Sainsburys rejecting loan applications, one I recall was for a similar amount (£10k).

I am sure others will be along soon to give their advise, but one common element lenders focus on is salary to loan ratio - and they may have considered yours too high. I'm not sure whether the £2k on the cc are the only debts you have, surely if you just wanted to pay those off, and only wanted the loan for 2yrs, you could get those paid pretty quickly? Although I understand if the main reason was for the car loan, then sticking another £2k on to clear those may have suited you as an option.

One other thing, is that the lenders look at what credit you already have available, so even if your cc balances are £2k, if there is significantly more available on those cards, that will still be taken into account.

If you really really need a loan for a new car (others would argue, buy a cheaper one, save etc) then perhaps the best place to go to is your current bank with whom you already have a relationship with.

lisaf

Hi Jessica,

a neighbour of my Mums just had exactly the same thing happen to her yesterday with sainsburys. She has very minimal credit card balances, v good credit rating AND this would be her 3rd loan with them (she has paid off the preivous 2 without missing any payments etc). They have asked her to write in and appeal for a manager to make the final decision.
I said I would knock up the appeal letter for her as she's not too good at wording these things - will be interesting to see what they come back with!
Lisa

jessicabuchanan

Yeah I'm currently writing an appeal letter at the moment, to request more information! Have they given any advice as to what to include?

jessicabuchanan

The £2ishk is the only debt I currently have - apart from my mortgage. I think the overall credit availability of those cards is £2.6k so I'm not maxing them or allowing myself to have lots of credit available, as I've paid my debt off I've reduced the amount available. I think I'll try and challenge them and if all else fails speak to my bank, although I'm currently looking to change banks.

property.advert

Debt consolidation is a no go area for some lenders, always has been, though tougher now. No-one wants to see the big picture these days, only their slice of your cake and to them, it is just additional debt as you may not pay off the others with their advance and as you cannot manage now, how will you manage with more debt ?

immoral_angeluk

Who do you bank with and do you have any joint financial associations on your credit report?

jessicabuchanan

I've successfully reduced my debt over the course of a couple of years, but thought it would be easier just consolidating.

I'm currently with Alliance & Leicester, with no joint accounts. I am in the process of applying however with my partner.

So general feel is you have to say the right things that you are going to spend it on, so what generally are the no goes to say when applying?