Will my defaulted business loan affect my credit score?

t0m_kemp

In August 2009 I took out a business loan of £15,000 from NatWest to start a small retail shop. At this time NatWest were lending £3b to new business start ups. They lent me the money despite me having a half arsed business plan, no finance plan, no job (having been a student for the previous 2years) and no fixed abode (I was living on a mates sofa!).

Now, as much as I appreciate that I was hugely nieve in my judgement, surely it is the job of a 'business manager' to asses my situation based on more than whether the computer says yes!?
I have spoken to a friend who was an ombudsman who told me 'you borrowed the money, you've got to pay it back' which I have accepted. However, do I have a case here for being mis-sold a loan that, in reality, should never have been lent to me?

The other question I have is why does the loan not appear on my Experian credit report? The loan was a business loan, taken out in my name, at my parents address. Since the business went belly up in 2010, I have entered into an agreement to pay the loan back via an recovery agent (owbed by NatWest, they still send me statements).

If it doesn't show up on my report, will it ever or is it lurking behind the scenes still affecting my ability to get credit?

If anyone could shed some light on this I would be massively grateful. Finding help from any of the government approved bodies has proved as good as useless!

jonesMUFCforever

You have nothing of the sort.
Did they knock on your door and force you to borrow the money - of course not and I bet you didn't think you business plan was half arsed at the time?
Of course you had no job - this was you trying to make something for yourself wasn't it? You could not have run a shop and have a full time job.

To answer your question - if you borrowed the money in a personal capacity (ie not as a limited company) then yes it will effect you credit files for 6 years from default.
It should not effect your parents at all as defaults are registered on people not addresses.

Southernman

It makes me laugh when people are happy to borrow money at the time with no qualms, then when they have nothing to show for it a few years later claim mis-selling. You weren't complaining when you spent the money were you.

t0m_kemp

Thanks for your response.

Why then, does it not show up on my Experian credit report?

The reason I raised these issues is I now work in motorcycle sales. When people apply for finance part of the proposal is proof of address and employment for the last 3years. It struck me as strange that the same does not apply to a business loan.

I think the recent Channel 4 program 'the bank of Dave' highlights the issue that lending has lost its personal touch. A proper business manager would never have lent me the money to get a tick in the box, he would probably have dissuaded me from starting the business before it was fully thought out.

This is not me saying 'poor me' and I appreciate that hindsight is a marvelous thing, but as a young person you often rely on your piers to offer advice and support, I don't feel I was offered any of this by NatWest. It was a case of 'how much do you want?' which to a young person is not what I would call responsible lending, especially in a time of economic uncertainty.

Needless to say I am much more cautious now and try my best to offer advice to people starting businesses not to make the same mistakes I did!

ILW

Possibly not covered by CCA.

t0m_kemp

Excuse my ignorance but CCA?

ILW

Consumer Credit Act.

t0m_kemp

Would you please explain how that would affect my situation?

Again...excuse my ignorance

DevCoder

Not so much mis-sold as mis-bought.

If the business/commercial loan was not covered by the CCA then you get far less protection.

t0m_kemp

People. I appreciate I was nieve, and have faced up to that. I intend to pay back every penny I borrowed, please do not tar me with the same brush as people who obtained easy credit, only to spunk it on cars, holidays and clothes! It would be impossible for me to explain the full extent of the situation and why I feel aggrieved with the lender.

If you just want to have a pop at me don't bother, I've heard it all before.

All I want to know is how this will effect me in the long run. I would expect a loan from NatWest to be covered by the CCA???

jonesMUFCforever

The CCA covers personal lending not business ones. This might be one reason it does not appear on your Experian report.

Could it be also that Natwest use another CRA?

If it does not appear on any of the CRA's then it might not affect any future application.
Reading between the lines do you want to apply for a new line of credit?
If so why not apply for ONE non Nat West product such as a credit card and see how you get on?