Need help understanding loan refusal and reading credit report

comdw

My girlfriend has a £2000 flexible loan and £1000 overdraft, both with HSBC and both in full use (also an HSBC mastercard with £500 limit, but £0 balance). She wants to buy a car so recently applied for a new loan (barclaycard) to pay off the existing loan and overdraft and finance the car - she asked for £7000 and was refused with no further information given.

I figured this would be mainly to do with the flexi loan, which although she pays £80 a month on without fail, she also keeps it close to the £2000 limit by transferring funds back into her current account.

I thought it best to get credit reports from experian and equifax before deciding what to do next. The Equifax one came today and I have to say I was very surprised at how little information was on it. There was no mention of the HSBC overdraft, loan or CC AT ALL (is this good?). There was one recorded search from Barclaycard for the recent loan application and two mobile phone contracts for the last year (even though one was cancelled within 14 days and was never billed). I can't find anything negative on it at all!

I'm not sure what she should try next (still waiting for the free online trial for the experian report). I thought it might be worth applying for the texaco life of balance CC and hope that its enough to get rid of the flexi loan and overdraft, and then apply for another cheaper loan separately. Has anyone got any other ideas?

I don't see any reason from the credit report not to apply for further loans. Does anyone know whether simply the amount you ask for can cause an outright refusal - wouldn't they simply offer you a smaller loan instead if they thought you were over-stretching yourself?

Debt_Free_Chick

I don't see any reason from the credit report not to apply for further loans. Does anyone know whether simply the amount you ask for can cause an outright refusal - wouldn't they simply offer you a smaller loan instead if they thought you were over-stretching yourself?

You'd think so, but no. Many of these applications are processed by computer, so you just get a simple "yes" or "no" answer. It seems that HSBC don't report credit history to the CRAs.

Has she tried to get a loan from HSBC?

comdw

She hasn't tried HSBC. I don't think they are very competitive and I'm not sure she would be too successful given her performance on the flexi-loan (i.e. not paying it off). I think she needs something in-flexible to force her to pay it off.

comdw

Just an update on this as there is still something that's not making sense. She's now applied for a Texaco credit card and got refused with the explicit reason that her EXPERIAN credit report had too many credit balances for her income. Yet we now have a copy of the Experian report (Credit Expert free trial) and it has no credit balances on it at all! The only credit account mentioned is a Singlepoint mobile contract from last year.

My question is - how did Texaco get the information about the other credit accounts held (presumably the HSBC loan and overdraft)? Do the banks share this information with each other without using the 3rd party services like Equifax and Experian.

Experian_company_representative

Banks only share information via the CRAs. Any idea who runs the Texaco credit card? If it was an subsidiary of HSBC of course they'd probably be able to access same group data.