MSE News: Lowest-ever loan from Sainsbury's fires up price war

Fairway871

ice_babe wrote: »

Applied for a sainsburys loan 2 days ago at 5.7% and was offered 6.7%

Yeh, me too. Sainsburys are being a bit dodgy. I have a 999(Excellent) credit rating and could not understand why they increased the advertised rate by 1% so I cancelled. M & S did the same though. These rates they are offering are really just a sprat to catch the proverbial mackerel in my view. I therefor went to my own bank, who are First Direct, and they gave me a no quibble 6.1% which is their advertised rate.

JuicyJesus

Fairway871 wrote: »

Yeh, me too. Sainsburys are being a bit dodgy. I have a 999(Excellent) credit rating and could not understand why they increased the advertised rate by 1% so I cancelled.

The reason is that your 999 excellent credit rating means precisely jack sh*t and is a waste of money. Each lender calculates its own individual score, thus making any you might pay to obtain useless. You would be better off rolling a pair of dice to find your credit score, as it will give you just as much of an indication as to the success of a credit application.

M & S did the same though. These rates they are offering are really just a sprat to catch the proverbial mackerel in my view. I therefor went to my own bank, who are First Direct, and they gave me a no quibble 6.1% which is their advertised rate.

Legally, they have to give the advertised rate to at least 51% of applicants. You were just in the unlucky 49%.

Unsurprising that your bank gave you a good rate, they know your finances inside out and so can assess them more accurately than any third party lender could.

Fairway871

JuicyJesus wrote: »

The reason is that your 999 excellent credit rating means precisely jack sh*t and is a waste of money. Each lender calculates its own individual score, thus making any you might pay to obtain useless. You would be better off rolling a pair of dice to find your credit score, as it will give you just as much of an indication as to the success of a credit application.



Legally, they have to give the advertised rate to at least 51% of applicants. You were just in the unlucky 49%.

Unsurprising that your bank gave you a good rate, they know your finances inside out and so can assess them more accurately than any third party lender could.

Just shows that the banking sector have learnt jack s__t from their recent experiences. How can clients judge their chances of reaching the required standard, if what you say is true, that credit scores from independent agencies are ignored. ( assuming that you are "au fait" with the real system.) There is little surprise that the banks were on the verge of collapse

somethingcorporate

Why would a bank listen to what another private company thinks of you? the credit ratings agencies would never be able to indemnify themselves against the bank (a third party) customer's defaults.

It is completely rational and logical that a bank uses it's own lending criteria to lend it's own money.

Fairway871

somethingcorporate wrote: »

Why would a bank listen to what another private company thinks of you? the credit ratings agencies would never be able to indemnify themselves against the bank (a third party) customer's defaults.

It is completely rational and logical that a bank uses it's own lending criteria to lend it's own money.

Then they should make that clear in their lending criteria. They mention the use of credit rating agencies in their guidance so it is illogical that they would not take the information into consideration. If other factors are more inportant in their decision making process then they should state what factors are considered.

JuicyJesus

Fairway871 wrote: »

Just shows that the banking sector have learnt jack s__t from their recent experiences. How can clients judge their chances of reaching the required standard, if what you say is true, that credit scores from independent agencies are ignored. ( assuming that you are "au fait" with the real system.) There is little surprise that the banks were on the verge of collapse

Erm... what?

Experian do not supply their credit score to lenders. What they supply is the raw data from your credit file, which lenders can and do interpret and judge however they like.

Thus the score is meaningless. It may as well be a random, made-up number. I would honestly not be surprised if it actually was.

The way you judge being at the required standard is by applying. That's literally the only way, other than obvious stuff (e.g. "I've got a CCJ and lots of searches on my credit file, probably best not to go applying for a loan right now") because it's entirely at the lender's discretion. Some lenders give guidelines (e.g. "only apply if your salary is over £xyz") but they can't give ALL of their criteria because it'd be a good way to have massive amounts of application fraud.

I'm not exactly sure what you're getting at with the comments about the banks. If anything the issue was banks lending too much too easily, and even if it wasn't that's still irrelevant to a discussion about a silly expensive number.

They mention the use of credit rating agencies in their guidance so it is illogical that they would not take the information into consideration.

They don't receive the information in order to consider it. Once again, your Experian credit score means nothing.

You should be more incensed that Experian bill you 15 quid a month for a pointless number and access to a credit report you can legally get for £2.

jamesd

That's getting interesting. It'll be lower than some people have on their mortgages, so for some it will pay to borrow the money to overpay on their mortgage.

redpete

Fairway871 wrote: »

Then they should make that clear in their lending criteria. They mention the use of credit rating agencies in their guidance so it is illogical that they would not take the information into consideration. If other factors are more inportant in their decision making process then they should state what factors are considered.

You don't seem to get it. They do use the information from the CRAs but they don't use the scores that the CRAs invent and give you.

If they advertised exactly what the criteria for lending are and how they take each parameter into account then there borrowers would spin their own circumstances specifically to get a loan.

redpete

redpete wrote: »

I hate websites where you fill in all the details to apply for a loan and when you press 'submit'it tells you that they are having technical difficulties and to try again later.

But I'm happier when I get an email asking me to call them back, the operator then transfers the information I entered into a different screen and I am offered a loan at the advertised rate that they give to 51% or more borrowers.

So now I can pay off the more expensive HP loan I got for a car that meant I had another £500 off the price of the car and 3 years free servicing and save at least £50 a month over the same loan period.

kenh11

How strict are Sainsburys generally in terms of acceptance rates?

Do you essentially have to have an absolutely perfect score?