Tesco Loan agreed in principle..

Fitzkepp

(I've removed the old text, as clearly it's too long.)

Question: Can someone advise on what kind of criteria underwriters work to when making a final decision?

Background: Tesco loan for £7.5k accepted in principle, Equifax credit rating "Excellent", £4k of standing debt on three agreements (also have three agreements with zero balance), monthly spend tends to be normal bills then any surplus goes towards paying off credit card debt, example being last month £850 paid off one card as that's what was left from salary after bills. Will the fact I use this approach jeapordise a final decision?

Two negative factors: only been on electoral roll at current address for 2.5yrs (lived there just over that) and have one instance of being 2 payments behind (March last year on an overdraft)

Any views appreciated, wondering if I should get my hopes up about this Tesco loan or not - thought when agreed in principle I was pretty much home and dry bar proving identity and address (the documents they asked for) but now thinking as soon as they look into things deeper they'll bin me.

Cheers

[Deleted User]

how much have you asked tesco for?

Fitzkepp

Hi, £7500 was what i identified to clear cards and change car, cheers

Fitzkepp

Bumped with a more concise question.

Cheers

[Deleted User]

whats the ratio of your existing debt and avaliable credit to you income,anything over 50% maybe a problem

Fitzkepp

I'm not sure I've understood the question correctly, are we talking what is the ratio of currently available credit + current balances vs net annual salary?

If so then it's over 50%, however the ratio of current standing debt vs net annual salary is closer to 25% - I have quite a bit of available credit in the form of cards I have cleared but not settled (for fear of needing them on a rainy day)

somethingcorporate

Unfortunately unused credit is factored in because there is nothing stopping you spending it.

Close down any unwanted / unused credit, having it there for "a rainy day" will harm your chances especially if it starts to push you over the border of ~50% of your annual salary.

You may need a month or two after closing the accounts for it to show on your files that is it no longer available credit.

Fitzkepp

Ah ok, that makes sense. Well there's nothing actually stopping me closing four credit cards now. To be honest the reason I'd held off was over the last 12 months I had been rejected for credit a couple of times (not really knowing why) and thus been reluctant to release what I have. Since the Tesco loan was agreed in principle and thus my credit rating is no longer immediately impeding applications, I guess I feel more comfortable closing the accounts to push even further on.

It seems as if I may have jumped the gun time-wise in trying to manage this situation, without the loan I project to be completely free of credit card debt by April -however doing this now would enable me accelerate the process plus change car which really needs doing this year.

I hadn't considered available, unused credit would effect this - however from memory I think the application process online included entering the balances and limits of current credit cards and loans (I now have a sinking feeling that my overdraft is considered a 'loan' but I have omitted it due to the semantic difference in description)

Fitzkepp

Three accounts closed, all three of Barclaycard, Natwest and Capital One were very efficient at closing accounts. The other will have to wait until the 25th, as it's the one we use for groceries and I'll need paying before I can clear my half of the balance.

£3k of credit, gone.

Super-debt-man

Hi Fitzkepp

I was approved for a 13.5k loan with Tesco last month. I got the 6.4% Apr rate.

Here are some FACTS about my situation when I applied:

Own my house
27k Salary
Experian rating was 727 ( I know this means nothing)
Equifax Rating was good
Already had about 13k of debt (Over 50% of borrowing see below)
Had a 8.5k Halifax loan with a terrible 13.9% Apr
Had 4 credit cards up to the hilt (totalling 5K)
Overdraft £1700
Never missed any payment
Had used Quick Quid twice in the two months before the application
Had just finished a loan with Tesco two weeks before I applied for the new one.

Despite some of the negative points above, Tesco lent me the money at their best rate and allowed me to put all eggs in one basket.

I think owning a house and having a good past relationship with Tesco helped me alot

If someone tells you that your current borrowing is tohigh, then this is not true. I was able to borrow 98% of my salary. Obviously I paid off all my old debts with the new loan but could of just gone and blew the money if I was that way inclined.

Hope this helps

Fitzkepp

Super-debt-man wrote: »

Hi Fitzkepp

I was approved for a 13.5k loan with Tesco last month. I got the 6.4% Apr rate.

Here are some FACTS about my situation when I applied:

Own my house
27k Salary
Experian rating was 727 ( I know this means nothing)
Equifax Rating was good
Already had about 13k of debt (Over 50% of borrowing see below)
Had a 8.5k Halifax loan with a terrible 13.9% Apr
Had 4 credit cards up to the hilt (totalling 5K)
Overdraft £1700
Never missed any payment
Had used Quick Quid twice in the two months before the application
Had just finished a loan with Tesco two weeks before I applied for the new one.

Despite some of the negative points above, Tesco lent me the money at their best rate and allowed me to put all eggs in one basket.

I think owning a house and having a good past relationship with Tesco helped me alot

If someone tells you that your current borrowing is tohigh, then this is not true. I was able to borrow 98% of my salary. Obviously I paid off all my old debts with the new loan but could of just gone and blew the money if I was that way inclined.

Hope this helps

That's really encouraging (and very odd timing considering I haven't been on here in days and thought this thread was dead!) purely objectively I'd say my situation in terms of salary/debt was more favourable but my big minuses on that basis are numerous cards, albeit with no balance, and not being a home owner.

Expecting a decision in the next 24hrs really, as the documentation was returned on Saturday so they should have received it yesterday.

In the meantime I've been closing cards, I now have two credit cards with actual balance on them - and after the 23rd I will have only one. I've wiped £4.5k in available credit from my file but probably not in time.

If this application doesn't succeed in a couple of months I'll try again with, hopefully, a far better case.

Cheers for the info though fella, it's been really encouraging. Might be able to replace the car yet!