999 Credit score cant got lowest rate

Benzyl

I applied for a Loan today for £14,950 from Sainsburys this was for a car and I was approved but at 8.2% not their headline rate of 7.2%

I was told this was to do with my circumstances,

I found this odd as I paid off all debts other than my mortgage in December last year. ( I was paying £200 per month off a Balance Transfer)

With the repayments of around £300 I would be left with another £400+ per month based on my current income and outgoings.

So why do I not qualify for the Advertised Headline rate?

The_Boss

Is this 999 score from Experian/Credit Expert? These scores mean nothing as lenders have their own criteria, and also their score doesn't take into account your monthly/annual salary.

If it's any consolation, I have never missed a payment, don't have much outstanding debt and don't have huge amounts of available credit, and Santander wouldn't give me their low rate of 7.2%, instead offering 14.9% - and I also have bank account and credit card with them.

There were also changes to the way the interest rate offered to you is calculated - now they only need to offer the typical rate to around half of applicants as opposed to two thirds previously. Maybe you were just a victim of this?

Also, the term of repayment and amount to be borrowed can also impact on the overall rate.

Benzyl

Thanks for the info

The credit report was from Experian

I did want to buy a car last year but decided to pay off all my other debt commitments before doing so.

It seems I should have applied before Feb!

It is not like I am over stretching my self either as even with the higher rate it is less than my previous commitments and I had a small pay increase from this month which is why I waited.
:mad:

I hope rejecting their offer does not cause me problems later on.

The_Boss

The Experian credit report is a great tool to use, but the scores are just a way of them making money - steer well clear

Don't worry about rejecting them causing problems. If you are applying for another loan, I'd just suggest waiting a week though, or even a bit longer. Although to be fair, 8.2% is still a great rate, and it's a guaranteed loan - whereas if you apply elsewhere, they may give a higher rate after you've completed the application or even reject you flat out.

Tixy

8.2% is still a good rate - and better than the majority of people are able to get. Why did you reject it?

I don't think applying before Feb would have made much of a difference - before Feb it just meant more people were turned down altogether, whereas now there will be more people who get offered a higher rate loan.

Benzyl

Tixy wrote: »

8.2% is still a good rate - and better than the majority of people are able to get. Why did you reject it?

I just feel that I am not a risk I have more than enough disposable income and have paid all my debts on time or early for the last 8 years, I manage my credit well and always find a way not to miss a payment.

Why should I not get 7.2% if 51% of their applicants have to get it to advertise the rate then they have to give it to some people, who are they? do they actually exist?

I can easily wait another 8 months to buy a car and my save the cash so I only have to borrow £12,000 or £13,000 or even use the deposit to get the manufacturers advertised 5.9% rate (they want more deposit than I want to pay right now).

I just really want to know why and of course they just say it is down to individual circumstances. which makes me want to know what makes me qualify for less than perfect rates!

Tixy

51% of applicants don't get that rate. 51% of people who are accepted get that rate, which is totally different, it could be as little as 5% of all applicants for all any of us know.

You just might not be in their target customer category - there is no way of knowing exactly why they didn't give you that rate, could be all sorts of things not actually to do with your finances - eg might be the sector you are employed in that they consider slightly higher risk, might be that you haven't been in your current job as long as they would like, or lived at your current property as long as they consider ideal.

BackOnTrack

Benzyl wrote: »

I just really want to know why and of course they just say it is down to individual circumstances. which makes me want to know what makes me qualify for less than perfect rates!

The computer disagrees with your risk assessment and therefore your rate is above the quoted rate. If you apply for another loan instead of accepting this one you may get an even higher rate because of the credit search that has just been done.


You say you have an additional 400 disposable income after the loan repayment maybe you need 500 more disposable income or 800 disposable income to get the best rate.

Banks are never going to reveal the details of their credit scoring process as this would open them upto people gaming it.

iolanthe07

It is nothing personal, Benzyl. You may just not fit the customer profile they are targeting at the moment. Being rejected doesn't necessarily mean that they think you're a bad risk.

BackOnTrack

He didn't get rejected though, he got his loan with a good rate it just wasn't the lowest rate

pmduk

hey possibly only ever intended to give that rate to a very small number of applicants. If you owe very little, it may be they feel you aren't going to earn them enough money.