Husband refused loan due to default on my personal loan

Elisew

I`d like to ask for some advice on a situation with LloydsTSB.

I have a personal loan with Lloyds TSB, this was taken out based on my current account. I`ve been unemployed for approx 2 years now but with my Husbands help the payments have still been made every month.
Unfortunately due to my Husband being whacked by CSA for the second time in 2 years, our finances have become more difficult so I wrote to the Branch Manager of Lloyds and also the collections centre to advise them of the situation and that from December 2010 I was no longer in a position to pay the loan repayment amount but I offered an amount of £75pm instead of paying nothing at all. Well I eventually got some sense and an agreement has been made between myself and the collections dept last week of the offer being accepted, payment to begin from March 1st.
My Husband is in the Military and has had no problems with his finances previously as he`s had a guaranteed wage to pay his loans and credit cards from. He is leaving the military this year and as he knows he will have his gratuity to pay off any outstanding debts that we both have, he paid a visit to Lloyds last week to see if he could apply for a loan which would enable him to accumulate the balances on his cards, knowing that the loan would be paid off this year with his gratuity.
He has been told that due to the default on my personal loan he now has a mark against his credit staus with Lloyds and they won`t even consider his request.
Despite the fact that the loan I took out is in my name and we are not financially linked with a joint account etc, the bank wouldn`t budge.
We have both been customers of Lloyds for over 20 years, my Husbands mortgage was arranged through Lloyds with C&G, he`s never defaulted on any loans, cards or mortgage payments. Needless to say he was fuming after his visit to Lloyds.

I`d like to ask if it`s legal and correct for Lloyds to do this?
We were hoping to be able to look at selling this house and buy another house next year once he`s left the army and paid off the oustanding debts but we are now worried that IF he does indeed have a mark against his credit rating that we won`t be able to do this.

I`d really appreciate some advice on this matter. Thanks.

Soph86_2

As far as I'm aware, lenders can refuse credit for any reason, so I don't think it's illegal.

It shouldn't affect him getting credit with other companies though, as long as nothing is on his credit file - I'd suggest obtaining a copy of his credit report from all 3 credit companies (sometimes information only appears on 1 of them) - experian, equifax and call credit I think?

If you're financially linked through a mortgage or any other type of credit though, your negative score may now affect his ability to get credit.

Sorry if it's not the news you wanted, but it's only my personal experience and not a professional one!

BW, Soph x

Elisew

Thanks Soph.

The mortgage is in Husbands name alone. We do not have any debts that are joint debts.

He pays a monthly amount for Experian I believe and he checked his rating on there, there appears to be no default or mark against anything on there which would lead us to believe that he shouldn`t have been refused a loan with Lloyds at all.

We`re just completely confused after years of being Lloyds customers, never having defaulted on loans or credit cards, hubby has a good wage every month going into his account.....yet Lloyds feel it`s acceptable to tell him he`s a risk and they won`t help.
I know the banks hold no weight when it comes to customer loyalty but even so, I just can`t understand how they can do this

Tixy

Sounds like this is just an internal lloyds marker. Probably the Lloyds 'credit policy decline' marker that they put on all sort of people's accounts for all sorts of reasons (or no reason at all sometimes).

On your credit files does it show a financial association between you and husband? If it doesn't then he could try applying to a different bank for a loan. And it won't affect his chances of a new mortgage with a different bank.

Elisew

Thanks Tixy

As far as I`m aware there is no association between me and hubby at all but I could be wrong and I would have to ask him to confirm if this is the case.

At the end of the day if Lloyds are just being a bunch of asses 'because they can be' then there doesn`t seem to be anything we can do about it, but my main concern is that the whole situation may cause us problems when we look to buy another house next year :undecided

KingElvis

Yep, it will be an internal CPD marker, just try a different bank or lender.

Elisew

Thanks KingElvis.

If it`s simply a CPD marker, would this be removed once the loans and cards are all paid off? :think:

We fully intend to pay off all of our outstanding debts (except the mortgage) when hubby receives his gratuity. We`ll definately be looking at banking elsewhere, we won`t bank with Lloyds any longer than we have to after this :mad:

Tixy

You would think so but for some reason people seem to have a right pain getting lloyds to remove these. So they may remove them almost straight away but if they don't then often no amount of asking why and appealing seems to get them to change their minds.

BigCraigJohn

You have to remember that banks will know a lot about you. It wasnt till I got a SAR that i realised the amount of things they knew about me, id probably told them at some point when I was applying for something but they know a lot. They will just effectively treat you and your husband as 1.
But please be very careful and make sure you pay off the debts that the loan is for straight away especially credit cards and lower the limits, better still cancel immediately, its how so many people(my self included) get into deeper debts ie paying the cards but then using them again.

Elisew

Hmm, so I guess we`ll just have to wait and see whether a fair few thousand sat in hubbys account will help them decide in our favour then. If they won`t remove the CPD then we`ll have no choice but to go to another lender, it would be a right royal pain in the !!! though because the current mortgage is on a really good deal until 2013 :undecided

Thanks again Tixy.

Elisew

BigCraigJohn wrote: »

You have to remember that banks will know a lot about you. It wasnt till I got a SAR that i realised the amount of things they knew about me, id probably told them at some point when I was applying for something but they know a lot. They will just effectively treat you and your husband as 1.
But please be very careful and make sure you pay off the debts that the loan is for straight away especially credit cards and lower the limits immediately, its how so many people(my self included) get into deeper debts ie paying the cards but then using them again.

Thanks BCJ.

The only way that I could get the collections department to agree to the offer I had made was to stress the point that the loan is in my name and hubby is not legally responsible for it. They continuously kept asking for his income details which by law I know I don`t have to give them. As I`m unemployed for longer than 6 months I`m not entitled to any help/benefits from anywhere based on hubby`s wage, my personal income is 0.
I do have a credit card but we`ve managed so far to make the monthly payments on that, so at least that`s one less hassle to have to deal with.

Hubby is likely to be working abroad once he`s left the army, this will involve a really good wage coming in so there will be absolutely no need to be 'borrowing' from the bank. We`ve already said we don`t have any intention of using loans and cards again...if we don`t have the cash then we simply won`t have it.

It`s just really bloody annoying that this is the first time in 20+ years that either of us have ever defaulted on our borrowing yet Lloyds think it`s ok to be total asses :mad: