Can't get loan with excellent credit score why??

sam23306

Hi, i'm new on here and just after some info and advice.

I have done my credit score on credit expert experian, scoring 999 excellent. So i decided to apply for a loan of £10,000 over 5 years from Tesco but was refused. I have also checked on Zopa, they are also saying that they can't offer any credit to me.

I have had no missed payments or adverse credit over the last 5 years, i have made 7 credit applications in the last year and only lived at my current address for 2 years which may be affecting the decisions i'm getting.

I can't understand why i'm not getting accepted with such a good credit score.

Any comments/advice welcome.

Thanks

shop-to-drop

Have you got a lot of credit already. Maybe down to credit/income ratio?

sam23306

I have a overdraft of £1000, a loan that has £400 left on it (3months) going to pay off with new loan and a store card with about £30 on it.

I earn over £22000 per year, with low bills.

What is the ratio lenders use?

Thanks

Tixy

All lenders use different ratios and other criteria, but as a rough guide usually anything taking your total credit to over 50% of your income is harder to get.
Sounds like you would be just over this £1k + £400 + £10k + £storecard limit (depending on what your store card limit is), so it could be a factor in your declines.

Also do you use your overdraft every month? that seems to also be classed as a negative by some lenders.

How many of your credit applications were in the last 6months?

fozmcfc

Firstly, the score means nothing to lenders and doesn't take into account many things that could affect you credit wise, plus there are 3 credit reference agencies.

Your bank would be the best place to start as they will know your financial position better than anyone else. If they say no, it is high unlikely you would get the loan elsewhere.

A few things that could go against you.

1/ 10k is a lot to be wanting to borrow if you have 22k earnings.

2/ If you are using your overdraft every month, then that is an indicator, you are living beyond your means.

3/ Are you on the electoral role at your current address?

4/ Have you been in long term employment?

5/ 7 applications for credit in a year, is pretty high. No more than 3 in 6 months is recommended.

sam23306

I use the overdraft every month and never pay it off in full because of being paid fortnightly.

I think i'll wait 3 months until i pay off my current loan and get rid of store card which i never use anyway, also pay some extra money into the bank to reduce the overdraft.

And also 3 of the credit searches will be over a year old then, so hopefully i will get accepted then.

Thanks for the advice, cleared it up for me.

Thanks

paulmcerlean

Overdraft may only be an issue if the balances are being reported to your credit file. Many banks do not.

Monkeynut

What was it that you needed the loan for? If it wasn't something urgent then it may be worth waiting a few months, and maybe applying for a smaller amount that isn't almost half of your incomes worth.
If your store card has a large limit that you're not using, contact them and ask them to reduce your limit, or cancel it even if it's not something you need.

sam23306

I was planning to use the loan for a used car to get a diesel to save money on fuel and road tax, and paying off my overdraft as it's costing me £30 per month in interest thanks to Halifax's unique system. I only had the store card for the 10% off, so i'll cancel that.

It sounds like it maybe worth waiting a few months as its not urgent to get the loan, just want to reduce my monthly outgoing by consolidating.

Thanks

Apples2

Buying a £10k car to save £50 on fuel is going to take a looooong time to make it worthwhile.

BugsyBrowne

sam23306 wrote: »

Hi, i'm new on here and just after some info and advice.

I have done my credit score on credit expert experian, scoring 999 excellent. So i decided to apply for a loan of £10,000 over 5 years from Tesco but was refused. I have also checked on Zopa, they are also saying that they can't offer any credit to me.

I have had no missed payments or adverse credit over the last 5 years, i have made 7 credit applications in the last year and only lived at my current address for 2 years which may be affecting the decisions i'm getting.

I can't understand why i'm not getting accepted with such a good credit score.



Any comments/advice welcome.

Thanks

If Experian rate you so highly have you thought about asking them for a loan?