Car finance declined, why?

techcastoni

Credit_Crunched wrote: »

Ask the dealership for details of the credit agency they use to conduct their searches. They will have a standard script which they should read to you, and the agency and its contact number should be included.

I would say that there must be an issue somewhere along the line (Possibly an error on your credit report), as having worked in the motor industry for more years than I care to remember, even in these difficult times, it is very rare for a finance house/bank to decline unless you have missed/late payments on any other agreements, or if you do not fulfill the affordability criteria.

Its worth checking to see if any late payments etc are logged on your file.

Experian lists all of my credit and finances I have taken out and shows that I have not been late or missed any payments. It even shows my monthly credit card statements. My credit history is spotless as far as Experian are concerned as far as as my memory goes.

BoGoF

And the limits on those cards?

techcastoni

Mara69 wrote: »

Is this the same as consolidating a loan - in other words although you're going to stop this agreement early it is still counted as debt?

So all the credit cards are at zero balance?

Not sure, but seeing as the finance company that funded the first car is also being asked to fund the replacement car (and that's what they do for many other customers) then surely they would take this into account.

techcastoni

BoGoF wrote: »

Ah, didn't spot the "several credit cards with decent limits".

Perhaps this is the problem. How much available debt do you have?

Not sure what you mean by available debt, I don't owe any money on any of the cards. Credit limit on these cards is less than 10k.

techcastoni

meer53 wrote: »

Since you took out the original finance, lenders have seriously tightened up their criteria. As you say you have several other credit cards with decent limits, this may be what has caused the decline. Even if they all have nil balances on.

You say you earn £30 - £40k, there's £10k difference, is it 30 or 40 ? My salary is a fixed amount, it's not a variable between 2 figures. If yours varies because of overtime etc, you will find that this won't be taken into account as it can't be guaranteed.

I wouldn't worry about how other people afford their cars, there will always be someone with a more expensive car than yours.

I didn't want to give away how much I earned exactly but it is between those two figures and to a certain extent it does vary.

Not so worried about how other people afford the cars, its how they swung the finance companies to agree to fund the car!

BoGoF

That £10k (or whatever it is) is available debt and will be taken into account when applying for more credit. The lender may take into account that you may be able to afford the finance on it's own but what would happen if you max'd out the cards?

How much were you looking to get on finance?

techcastoni

BoGoF wrote: »

That £10k (or whatever it is) is available debt and will be taken into account when applying for more credit. The lender may take into account that you may be able to afford the finance on it's own but what would happen if you max'd out the cards?

How much were you looking to get on finance?

It's a potential approach that finance companies are taking but Experian would also suggest it's a positive thing. Experian gave me a higher score for having cards with a high limit as its an indication of trust that the credit card company believes I can afford to repay that balance.

Finance was for 20k.

BoGoF

techcastoni wrote: »

It's a potential approach that finance companies are taking but Experian would also suggest it's a positive thing. Experian gave me a higher score for having cards with a high limit as its an indication of trust that the credit card company believes I can afford to repay that balance.

Finance was for 20k.

Experian don't lend money though.

So your potential debt exposure would be £30k - not realistic on your salary I'm afraid (these days anyway).

techcastoni

BoGoF wrote: »

Experian don't lend money though.

So your potential debt exposure would be £30k - not realistic on your salary I'm afraid (these days anyway).

Yes, I understand they don't lend money but they are supposed to help in understanding a part of your finances. So unless you're suggesting they don't know what they're talking about or they're giving out bad advice on purpose then it doesn't explain why they're suggesting it's a good thing.

BoGoF

Their credit scores are utterly meaningless. They can talk in general terms and yes having a provable credit history with credit cards is a good thing but there are limits as to what lenders are prepared to risk in terms of % of salary. Anecdotal evidence would suggest that figure is somewhere above 50% of salary and the perceived risk increases. There will be the odd person here saying they have borrowed way more than that % but that seems to be the exception.