High credit score but refused loan

Emmrmil

Hey - I applied to my current loan provider for a new loan to consolidate cc 's and turned me down saying I didnt pass credit check. i signed up to Experian and I have a score of 955 with no negatives....??? I have no idea as to why I was turned down? I have written to the loan company for a further explanation. Can anyone shed any light?:(

malkyh

Can you give some more info.

How much did you apply for?
What is your annual salary?
Current debts?

Just because you have a high credit score, doesn't mean you are always going to get a loan.

For example, someone earning £10,000 a year with a credit score of 999 will not get a loan for £50,000.

Tixy

What is on your credit file is only a part of the information that a potential lender considers.

A score is a near useless guide as to how likely it is you will be accepted (plenty of people with 999 scores who've never had any credit at all and so have no history of repaying back debts and are therefore considerd high risk by lenders regardless of what experian says.

As to why else you may have been turned down - what existing debts do you have?, what did you apply to borrow? how does that compared to how much your salary? (often with consolidations being turned down is when the banksthink you'll struggle with affordablity

Emmrmil

its complicated - I earn in mid 20's full time but am on reduced hours so am regarded as part time?? I think - need loan of 10 to cover - cant see why it would be such a big deal as it would reduce outgoings. surely as an exsiting lender they are aware of my payment commitment

malkyh

It's not that easy to get a loan nowadays.

Word of advice, do not start applying willy nilly to lots of companies now. This will have a negative effect on your credit, which will make it even harder. Leave it a few months before trying again.

Tixy

Any new loan will be viewed as additional credit on top of what you already have (you might go out and spend it on a holiday not paying off your cards, or you might run up the cards again), so they'll look to add together your existing debts and your new loan and see if you can afford repayments on the whole lot.

As a guide in the current climate people struggle to get new credit that takes them to 50% of their salary. So if you already owe £15k and want to borrow a £10k loan you'd need an income of around £50k.

Emmrmil

I really appreciate, but my existing loan is less than 2, and this will be included in the 10 - so my total would be 10 and there is nothing else. My income is about right - very frustrating. I appreciate they consider affordability and income expenditure but I dont owe anything else and my income will go back up in September to mid 20's. ARGHH!!!! Will have to wait until June when existing loan finishes. What a pain. Will let you know what existing lender say in response to my letter

DCFC79

Oh and dont get hung up on the score of 955 as it means nothing,

somethingcorporate

So what is your current income? this is the only income value that the bank will care about.

Tixy

emmrmil wrote: »

I really appreciate, but my existing loan is less than 2, and this will be included in the 10 - so my total would be 10 and there is nothing else. My income is about right - very frustrating. I appreciate they consider affordability and income expenditure but I dont owe anything else and my income will go back up in September to mid 20's. ARGHH!!!! Will have to wait until June when existing loan finishes. What a pain. Will let you know what existing lender say in response to my letter

If you want to include the £2k with the same provider in the new loan of £10k then you are looking at exposure of £18k (the new loan of £10k and presumably £8k on the cards), and at the moment you are earning less than £20k(?). I don't think any lender will think your income is about right for servicing £18k of debt. And they always look at worst case scenario as to how much debt you could end up in.

Emmrmil

will wait for a while before applying again. No total new loan will be for 10 all in, nothing else. so income is ok. Who knows.....but annoying and frustrating