Rejected for car finance

NeglectedFish

Hi,

I've just been rejected for car finance. It's my first major finance application I've made in several years. It's been a massive blow, as I've only recently gotten round to passing my driving test.

I subscribe to Credit Expert and Equifax which gives me unlimited access to my credit profiles. I've also purchased my statuatory report from CallCredit.

I have two mobile phone contracts, one credit card and one overdraft. Everything is 'green' on my profile with no missed or late payments ever. I use the credit card regularly for work expenses when travelling. It has a limit of £1100 and a balance of around £900 each month. I'm in the overdraft regularly also, as it only costs £5 a month to use. I've never exceeded my limits.

I work full time in a permanent role. My income is in the upper tax bracket and I've been with my current employer for 19 months.

From what I've read, all this would generally be considered 'good'. There a number of things that might be questionable, so I'd greatly appreciate how much of an impact this might have had on my recent credit rejection.

1) I've lived at my current address as a private tennant for 2 years.
2) I've lived at two other addresses in the past 6 years, both as a private tennant.
3) Credit Expert have 20 linked addresses against me. All of these are variations of the same addresses. My past three addresses have been flats and it seems like everyone has their own way of listing each address (Flat 1/2, 1/2, 1-2, 1,2 etc etc)
4) I'm currently on the elecotral register at my current address. However, I've not been on the electoral register in the past at any other address.
5) I've lived at other addresses more than 6 years ago. These addresses are not on my credit profile.

If any of this suggests why I might have been refused, can you please let me know? If there's anything I can do to help with any future application, I welcome your comments. I'm scratching my head as I have no solid idea why I've been rejected.

As per my rights, I asked the creditors why they refused me, and they said that I didn't fit within their lending criteria.

Any advice is greatly appreciated.

Regards,

Fish

rising_from_the_ashes

NeglectedFish wrote: »

. I use the credit card regularly for work expenses when travelling. It has a limit of £1100 and a balance of around £900 each month.

Do you put around £900 on it each month & clear the balance in full - or does it have an outstanding balance of £900 on it most of the time?

NeglectedFish wrote: »

I'm in the overdraft regularly also, as it only costs £5 a month to use.

If you don't clear the balance on the card in full each month & are also in your OD then that could well be the reason.

Being on a very good income & not managing to not dip into your OD, or carrying an outstanding balance on your cc could be considered as signs that you a) can't manage your money well and/or b) can't meet your current obligations.

Re the linked addresses - these won't be seen by lenders. They will only see one entry for each address - so this won't be a factor.

Do you have any other credit agreements showing on your report - eg mobile contract etc. If not, then it could be that there's a lack of information for them to be able to judge your history at paying things regularly.

Are there any late payment markers etc?

Mara69

First thoughts:

• Living in your overdraft is seen as poor money management and will count against you.
• Being nigh on at your limit on your credit card will count against you as it also shoes poor money management (I am assuming you mean it is at £900 spent at the end of the month, not the other way round!)
• The short period of time at your current address will count against you.

vax2002

They know far more about your employment prospects than you do, with only 5% of the required spending cuts made so far, there is a storm on the horizon.

BugsyBrowne

rising_from_the_ashes wrote: »

Do you put around £900 on it each month & clear the balance in full - or does it have an outstanding balance of £900 on it most of the time?



If you don't clear the balance on the card in full each month & are also in your OD then that could well be the reason.

Being on a very good income & not managing to not dip into your OD, or carrying an outstanding balance on your cc could be considered as signs that you a) can't manage your money well and/or b) can't meet your current obligations.

Re the linked addresses - these won't be seen by lenders. They will only see one entry for each address - so this won't be a factor.

Do you have any other credit agreements showing on your report - eg mobile contract etc. If not, then it could be that there's a lack of information for them to be able to judge your history at paying things regularly.

Are there any late payment markers etc?

Have to disagree on one thing you suggested, not clearing his credit card balance every month won't Have anything whatsoever on his rejection.
Also being in the OD would have very little effect, my bet is on the addresses.

rising_from_the_ashes

star-fire wrote: »

Have to disagree on one thing you suggested, not clearing his credit card balance every month won't Have anything whatsoever on his rejection.

Totally disagree .... you could go up to practically your limit each month but as long as this is cleared in full each month, it shows you're able to live within the money you have available and are able to manage your finances.

Having an outstanding balance, especially one near the top of your limit, shows exactly the opposite.....

Same with the OD

BugsyBrowne

rising_from_the_ashes wrote: »

Totally disagree .... you could go up to practically your limit each month but as long as this is cleared in full each month, it shows you're able to live within the money you have available and are able to manage your finances.

Having an outstanding balance, especially one near the top of your limit, shows exactly the opposite.....

Same with the OD

So basically the eligibility on car finance should be you can't be seen going into an OD and you will be turned down if you don't pay your credit card balance off every month.

Sorry mate I am not buying this, Its something else that the reason he was declined.

rising_from_the_ashes

star-fire wrote: »

So basically the eligibility on car finance should be you can't be seen going into an OD and you will be turned down if you don't pay your credit card balance off every month.

If someone who earns a decent salary (which a higher rate tax payer does!) - constantly has £900 outstanding on his/her credit card and needs to regularly use their OD ... then I'm sorry but, yes, that will imply they cannot manage their finances well.

toddle2u

So basically the eligibility on car finance should be you can't be seen going into an OD and you will be turned down if you don't pay your credit card balance off every month.

Sorry mate I am not buying this, Its something else that the reason he was declined.

Have to agree with this. It will be down to the fact the OP is not a home owner, only been on electoral role 2 years and the linked addresses. Has nothing to do with od and cc

NeglectedFish

Thanks everyone for your replies.

It does make sense that a creditor will see me as high risk since I have a well used credit card and make regular use of my overdraft. I don't always clear the balance every month. I claim expenses from work, which are paid along with my monthly salary. Any credit card purchases that month are usually paid off with the expenses payment from my employer. However, sometimes I use the card for myself and don't necessarily pay it off immediately.

Regarding the overdraft, I do use it almost every month. Since it's a fixed £5 charge to use (Santander Reward account), I didn't think I had much reason not to use it. It does add up that a creditor might see this as bad money management. In actual fact, it's more beneficial for me to save my income and use the overdraft that it is to clear the overdraft and not save any money that month.

I guess I should clear the overdraft and see how that helps. However, I'm always going to have work expenses that will invaribly be wacked on the credit card. I'll be sure to clear the balance monthly.

Thanks everyone so far.

Fish

rising_from_the_ashes

toddle2u wrote: »

and the linked addresses.

As I said earlier - only one version of each address will be shown when lenders see your file:

http://help.creditexpert.co.uk/help/CreditExpert_OOS/Credit_report/al1