Help getting accepted for a loan

haz84

I'm after a bit of advice on how I can improve my chances of getting a loan. About me...

Earn over £30k per year
Been with my employer for over 3 years

I have 2 credit cards:

American Express with £4,700 credit limit - I use this for a lot of day to day spending (and for work expenses) because I earn 1% on everything I spend. I don't need a limit as high as £4,700 - this was what was given to me - but I haven't changed it because I thought it would look good if lenders were offering my a higher limit.

Santander with £2,800 credit limit - I use this only when American Express isn't accepted.

I pay both cards off in full every month.

I assume that the above shouldn't have a negative affect on a) my credit score, or b) a lenders willingness to offer me a loan?

Where I think the problem may lie is Electoral Roll information, which I don't think I can do much about....

Until 2 days ago, Equifax didn't show me as being on the Electoral Roll at my current address. This has now been updated and has also linked other addresses that I've been registered to. Over the past few years I've tended to move fairly regularly and whilst I've generally updated the Electoral Roll, I have (until recently) kept my financial life at my parents address. I actually find it quite difficult to understand what Electoral Roll information Equifax hold for me because the dates don't appear to be in the same format. Anyway, as of yesterday, I know that Equifax show me as being on the Electoral Roll at my current address, where my two credit cards are also held.

Yesterday I applied for a loan at Zopa. I asked for £15,000 over 5 years. I pay £480 per month in rent. Their initial check showed that they could offer me a rate of 7.9% (~£300 per month repayments), however I received an email this morning saying that I'd been declined. I know that they won't tell me the specific reason for turning me down, but I don't know what else I can do to improve my chances. The loan is clearly affordable, I have an excellent history of paying the full balance on my credit cards and they can confirm my address.

Is it possible that the credit report they had for me was outdated and therefore didn't show me on the Electoral Roll (I checked that I could see it on Equifax before I submitted my application)?
Will lenders just avoid me because I haven't been on the Electoral Roll for very long at my current address?

I'm so frustrated by all of this, because despite demonstrating that I always pay my credit card in full (and have done for years), I seem to be classed as a high risk.

As a side note, I went in to NatWest (with whom I've banked for 27 years - since birth) a couple of weeks ago and the best rate they could quote me was ~18% (rather than the 8.9% advertised rate). This was before I contacted Equifax to ensure my address and Electoral Roll information had been updated, but I found it odd that given my history with them they couldn't offer me a better rate.

I don't really know where to look next, and I don't want to apply for lots of different loans as I know that will negatively affect my score. I've also spent £30 this month paying Equifax to tell me my up to date credit score and I don't really want to have to keep checking (although I don't think there's anything else I can change on there now). Is my best bet going back to NatWest now that I've made changes to my credit report and hope that they can be more competitive?

Thanks in advance.

DCFC79

So how long you been living where you are now ? id ahazrd at a guess its because you havent been at your current address for a decent amount of time. Why the urgency for the 15k loan ?

haz84

I've been there 10 months, but only on the Electoral Roll there for a couple of months.
I realise that the length of time at an address is a factor to be considered, but it's almost like this is being looked it in isolation and no one is looking at the fact that I'm responsible with money and can easily afford to pay the loan back.

£15k is for a new car, mine is on its way out and about to start costing me a lot of money to keep on the road.

jon_boy75

Zopa use Experian, as far as I know

jon_boy75

try 1 more application with a different lender, then don't try again for a while. CRAs are terrible at updating information correctly, even though this is their sole function on earth.

Electoral Roll info is pretty high up in terms of how lenders will score you, so worst case you may need to wait 6 months

haz84

I can't find it now, but somewhere I looked on Zopa's info said they use Equifax. It's so frustrating not knowing what information they've seen. I also thought that as they asked for my landline number (I even went and spent £20 on a phone to plug in so my landline works in case they called!) and work details, they might have made an effort to confirm where I live.
Thanks for the advice. I think I'm going to go and see NatWest again now that I know some changes have been made. If they can't do anything then I don't think anyone one else will, and I'll just have to hope the car lasts another 6 months without big things breaking.

chesky369

You already have £7,500 credit available to you. You're asking for a further £15,000 which will total £22,500 available credit. This is well over half your annual salary so that might also have a bearing on the refusal. Why do you need so much right now - is it for a specific purpose?

chesky369

Sorry, posting crossed with your last one regarding the info. on the car. You may find getting finance through a dealership easier (but more expensive).

haz84

I want to avoid dealership finance if possible because that'll probably end up as high as NatWest's first offer. If any lender could tell me whether or not having £7.5k available on credit cards is a bad thing or not, then I'd happily lower the limits. I don't want to do that without knowing though, in case it somehow has a negative affect.

haz84

I popped in to NatWest last night on my way home and they did another soft check to see if anything had changed. Sure enough, they reckoned they could now get the interest down to around 11/12% That's still higher than I'd like, but might be my only option. The girl suggested that I wait until 1st March in case any of my changes haven't actually shown up yet (they refresh their data on the 1st of each month), as she has seen her own credit score go up over night between the last day of the month and the 1st.
So I'm booked to go back and see her on the 1st and hopefully get a loan. If I could get the advertised 8.9%, I'll be over the moon. If I can get 10-11%, I'll be happy. Hopefully it won't be any higher than that!

In response to chesky369 - I asked about my available credit and she didn't think it would have any affect (based on my salary and the amount available to me). She said perhaps if I was after a mortgage and a £25k loan, but not for this amount.

jamesd

Ask Zopa whether they did or didn't see you on the electoral roll, letting them know that that was corrected recently. If that was the only reason for the decline decision they might say you can reapply.

That may not be the reason, though. One possible reason to be declined is moving around too much, which is commonly taken as an indicator of higher risk by lenders.