Santander or Tesco

MCam

Hi all. First post so go easy

Firstly I'm looking at getting loan. I'm changing my job in the next few weeks and involves a longer commute so want to get a new diesel car.

I've done some quick calculations and the money I save in fuel will more than cover the interest (i have an older uneconomical car...) so it seems like a good option.

About 4 years ago I was very silly, turned 18, got credit cards, got other bits and inevitably ended up in debt and defaulting.

Santander and Tesco have both offered the best rates and around 14% APR although this is pre credit check. They both say I must not have had CCJ's, been declared bankrupt or defaulted in the past 12 months (which I haven't). I'm now back on the straight and narrow with everything paid on time and will be clearing my last debt this month on my credit card (£1000) limit and only card I now have).

My question is, even though my credit history has been bad, it has been flawless for the last 16 months at least, am I likely to get a loan from either of these, and if so who would be the best option to proceed with (both within 0.1% APR of each other)?

I'm on the electoral register and the only credit I have is the 1K on my card. I'm not a home owner and am living with my mother. I'm on 18K basic salary.

Any help or advice would be greatly appreciated. Thanks!!

Tixy

Unlikely to get a loan with either with defaults still on your credit file - even if you did it would almost certainly be at a much higher APR than the advertised rates.

How much were you hoping to borrow?

MCam

I'm looking at £6500 which is the cost of the car + £500. For reasons unknown, borrowing £6500 is cheaper than £6000.

Is there any alternatives? Another option I was considering was some sort of finance agreement against the car but not sure where I would start with that.

The particular vehicle I've found is through contacts from my workplace (I work in the car industry). It's an absolute steal so I'm eager to get it, however they don't do finance agreements unfortunately.

Side note: I've read on here that MBNA are pretty lapse with making entries on credit files. Is this true? MBNA is whom the majority of my defaults were with.

Thank you for the quick reply!

Tixy

Have you checked your credit file? I would do this so you know what is on your file. It might even be worth getting experian and equifax and then looking for a lender that checks whichever of your files look best (if they vary).

You say that the majority of your defaults are with MBNA - did you have more than one debt with MBNA? each debt can only have one default issued against it, which can only happen after a default notice has been sent to the customer. I think its very unlikely that a default would not be recorded at at least one of the CRAs after a default notice has been sent to you.

If you are talking about late payments rather than defaults then this is a different issue - whilst they still affect your credit file they are not as bad as defaults.

Usually with a poor credit file it is easier to purchase a car on finance rather than an unsecured loan.

MCam

Thanks again for the reply.

No I only had one debt with MBNA. I didn't realise that you can only have one default though! MBNA are the only ones I defaulted with as fair as I'm aware (will check my credit file though). I do know I had late payments with others though.

How would I know which lender checks which CRA? Would it say on the application or would it involve some research?

Tixy

There is a thread somewhere on MSE that claims to say which firm checks which CRA. I don't know how accurate it is personally but it would be a good starting point. Its called something like 'who really uses who' , will see if I can find.......

Edit Credit Reference Agencies - Who Really Uses Who? II its on the CC forum but I think it covers loans as well (possibly).

MCam

That's brilliant thank you. Seems they all use Experian with the exception of a few...

One final question for now. I should have mentioned that I also have my main bank account with Santander (my other is just a little savings account with another bank).
Would this go in my favour as they will be able to see that my account has always been in credit for the past 16 or so month and that I haven't had any failed DD's? Or will they treat me like anyone else applying for a loan.

jimbo83

I recommend that you look at your credit file (each of the three houses) - to see what they have.

This will give you a better idea of the negative aspects of your credit file.