Confused in obtaining credit

ChopperDeemus

Right, lets start from the beginning.

In the last 2 months I have recently been approved for a mortgage with Halifax for £117,000 and still waiting to make the first payment.

In the mean time, I need a new sofa so after choosing a sofa from Harveys I decided to use their credit company Ikano for credit as I dont have the funds readily available, the credit was declined.

I was worried about this and I was told by the sales assistant it could be due to the fact of recently being accepted for a mortgage,
however I signed up to Experian to get an understanding of my credit report.
The report showed that my score is good and currently stands at 901, also all details for electoral roll and aliases also all stand correct.

I also spoke to my FA about this and even he couldn't understand the reasons for refusal.
Another option i decided to take was a personal loan to cover the cost of the sofa from Zopa.com again this was declined.

Some of my personal details are:

I am a teacher earning over £23000 pa
no loans/debts/credit cards
26years old
have lived at current rented acc. 16 months
previous address 24years

If anybody could please enlighten me as to why I cannot get credit it would be a weight off my mind,

Thanks in advance

DevCoder

The experian (or any other CRA) scores mean absolutely nothing, lenders do not use this scoring and CRA's do not lend.

It's probably down to your mortgage acceptance, although your IFA would have more insight as they would be in possession of more information then you've provided here (statements, SoA etc).

You also do not want to apply for too many loans in a short period, each search (unless soft) is recorded and lenders do see these.

ChopperDeemus

Thanks for your instant response, how long would you think it would take for the mortgage acceptance to not have an affect on getting credit?

DevCoder

Its difficult to say, could you not apply for a loan with your own bank and if they refuse then ask for the reason?

Or try soft search loan applications which don't leave such a footprint.

ChopperDeemus

Thanks again, I will give Natwest a shout first.
Are unsecured loans also worth looking into (like ones who accept with poor credit etc?)

DevCoder

I wouldn't go down that route unless its very very last resort due to high APR.

I assume there was nothing on your credit report, missed payments etc?

ChopperDeemus

no, nothing at all for missed payments,
the only negative factor on Experian is saying that I have no successfully settled non-mail order accounts.

the only reason why I asked about the unsecure loans are because I looked at one and the APR was almost the same as Natwest which is 21.9%

dealer_wins

Buy a house without funds to furnish it. Great plan!!!

jamesd

Unsecured loans like those from NatWest, Zopa and such are worth considering. Secured loans are those like the mortgage where you property can be taken if you don't make the payments. Consider:

1. You've probably moved. So you probably aren't on the electoral roll at your current address. You also probably now have minimal time at the current address. Both significant negatives.
2. You have a substantial new credit commitment, the mortgage, and many lenders will want to allow time to see how you handle it before extending more credit.
3. [STRIKE]Extremely[/STRIKE] poor credit history, a complete lack of loans and credit cards, so no way to judge how you handle credit.

So you look like a gamble, with no history of credit to judge you by and large amount of credit recently taken out. Shouldn't be surprising that you're getting turned down with such a poor record.

There are worst records than one with no history, of course. Lots of defaults, say. But nothing is still likely to be pretty poor.

Try getting a credit card and using that. A place like Virgin is more likely than most to accept you.

27col

When we bought our first house in 1961 we had no furniture except for a few odd bits of s/h tat. We did not even have curtains in the bedroom. I remember that we used to get undressed on the landing. But it did not take long to get a few bits of furnishings together and within a year the place was quite good enough for us to invite friends. We did not get anything new for at least a couple of years. But we never had to waste money on rent, any money we spent was increasing our equity in the house.
You have to accept that you cannot have everything at once, despite what others, up to their eyes in debt, might say.
This is just a few thoughts from old father time, ignore them if you want, I won't be offended.

Apples2

27col wrote: »

We did not even have curtains in the bedroom. I remember that we used to get undressed on the landing.

LUXURY!!!
The only privacy we had was when Ice formed on the inside of the windows.