Ratesetter - what to make of this???

Simon7685

I checked this months credit report from Noddle the other day, it was recommending me a 9/10 chance of a ratesetter loan. So I went onto their site to have a look, as there was no credit search involved I went for a quote.

Amount - £5,000.00
Term - 36 Months
APR - 8.6%
Payment - £157.31
Total Amount - £5,664.48

Then to proceed with the application I needed to answer some questions, one of which asked if I had any defaults. Well the fact of the matter is yes, I have 1 which is 5 1/2 years old. Other than that I have a clean file, no late or missed payments and numerous accounts with a lot of green ticks. However I am not stupid and understand that the chances of being accepted with a default are virtually non existant.

So I did not proceed. Yesterday I received an email advising me of the quote and encouraging me to proceed with the application and if I had any questions to contact them. So I thought okay lets be entirely honest and ask them.........

So I emailed explaining that I had problems in the past and a 5 1/2 year old default. Also that I had numerous accounts on my file showing lots of positive credit history and well managed accounts with a low debt to credit ratio because I clear all my bills in full every month. This was the response I received, which amazed me to be honest.....

As a Peer-to-Peer Lender, our criteria for lending are different from traditional Lenders. As it is in effect our investor’s money which is being lent, we have a responsibility to be as responsible as possible in our lending decisions. This means our lending criteria are higher than most Lenders. We generally only accept borrowers with an A credit rating, amongst our other criteria.

There are three main considerations our credit team take into account, the affordability of the loan, your credit score and past credit history. Unfortunately we don’t have a way of assessing these until you have made the full application. However as you have been provided a quote, it is an indication you may be able to borrow through RateSetter.

I would like to take this opportunity to make you aware that RateSetter application leaves no impact on your credit file, which would make it easier to try with another Lender if we do not approve your application.

Kind regards,


I was completely surprised that they did not just advise me that any application would be a waste of time. I am really curious now as to whether to proceed with it, just to see what happens and would love to know what some of you think my chances would be????


Also this email suggests that they do not make a full credit search during the application process which I do not understand. How can they assess your credit worthiness without a full search???

27col

I am not sure what your point is. It seems that they have been extremely frank and open about the way they operate. As a peer to peer lender myself, albeit in a small way with Zopa. I am extremely grateful that they have strict lending criteria. In fact, if they did not, I would not be lending via Zopa and probably a majority of their lenders would back out as well.
If you want a loan then you need to go through their procedures, if they say your application will not affect your credit file then presumably it won't.

Jules2012

I imagine they must do a soft search, like Barclays (apply with confidence) do for their credit card?!

Eonel

I suspect this is a standard text reply that they can not assess your suitability for a loan until you have completed the application. They have either not read or have ignored your admission of having a default at this point.

They do make the point that they do have higher lending criteria than traditional lenders. This suggest they will not approve your application, but there is really only one way to find out...

Apples2

Do you actually need a loan?

Comes across as though you are applyng solely because you have seen a hint that someone might lend to you which is plain madness.

_Andy_

The email doesn't suggest they don't do a search - it just says they don't record it on the file. Of course they'll do a search, any lender would.

Any of us saying you would/wouldn't get the loan is pointless and pure speculation. If you want to try it, just apply.

_Andy_

PS the email isn't saying you will/won't be successful - it's just generic wording which is in effect saying you might/might not be approved. It's basically meaningless.

Simon7685

I take your point Andy and agree it would be madness for a lender not to carry out a search but the last paragraph appears to suggest that is not the case.

I would like to take this opportunity to make you aware that RateSetter application leaves no impact on your credit file, which would make it easier to try with another Lender if we do not approve your application.

_Andy_

no it says 'leaves no impact on your credit file' - it just means they will do an unrecorded search, not that they won't do one

nardocott

As others have said it is most likely a soft search. I did one a while back and it didn't seem to do me any harm. I used to lend with Ratesetter (while saving for a house deposit) and found them really frank and honest. I have spoken to them a couple of times and found them really helpful. I would say go for it if you need to borrow the money and if you aren't sure give them a ring.

ElkyElky

Taken from Ratesetter's FAQ page:

When you apply for a quote with us, we will make a ‘soft search’ on your credit file. This is marked as a quotation. It will be visible to you and other Lenders but will not affect your credit score. If you make a full application with us, we will make a full credit search once you are approved. This gets recorded on your credit file as a search. Please remember that multiple searches on your credit file over a short period of time is likely to affect your credit rating.

http://www.ratesetter.com/borrowing/any_questions.aspx

Essentially, your initial application will be recorded as a soft search. If approved for the loan and you decide to proceed then they'll preform a full credit search.