Declined - Advice please

Cthrower

Hi guys.

My OH has applied for a loan to get a new car, well a second hand car.
The bank has declined to lend her the money, but they don't say why and just give a generic answer "Unfortunately at this time we have been unable to accept you".
She doesn't have any credit history really except for in the past year or so, could this be the problem?

We've recently moved into a new house, renting, and she's yet to change her address on the electoral role also, which I assume won't help the situation?
She has an overdraft facility with the bank, which has never been over the limit, and also finance for some sofas at DFS, the account is about 7 months old with no missed or late payments.
Other than that there's no history, no defaults or late payments etc.

Could it be the lack of history that puts people off, followed by the DFS finance (Through Santander) which is relatively new?

Is there any ways to boost her credit history/chance of being accepted?

Thanks in advance for any information.

masscrazy

Bizarre this situation.

So you need to have had previous credit for you to have a credit history.

So someone who hasn't had the need to borrow in the past and has no debts will get no credit since they haven't got a borrowing history.

Cthrower

I agree, it's a bit confusing. I may just be confusing myself though.

I've looked at her credit report and see no problems, as I say, no misses or late payments, defaults etc.
No linked addresses, or financial associates that could bring her down.

Perhaps being in the overdraft doesn't help, although it's an agreed overdraft it show's the a lot of the available credit is in use. Maybe clearing the overdraft off and having less % of available credit usage could help.

jonesMUFCforever

Does she have a salary going into her bank account?

Cthrower

Yes, same date each month never late.

gb12345

Cthrower wrote: »

She doesn't have any credit history really except for in the past year or so, could this be the problem?

A short credit history won't help, but it is better than no credit history at all.

Cthrower wrote: »

We've recently moved into a new house, renting, and she's yet to change her address on the electoral role also, which I assume won't help the situation?

This will likely be the problem - she isn't on the electoral roll, which will be one of the things any lender checks.

Cthrower wrote: »

She has an overdraft facility with the bank

Does she regularly use the overdraft facility? If so, that's another red flag.

Cthrower wrote: »

Is there any ways to boost her credit history/chance of being accepted?

Get on the electoral roll asap.

Look to take out one of the sub-prime credit cards and use it each month, but make sure she repays in full each month.

Give it 6 - 12 months and her credit history should look a lot better.

gb12345

masscrazy wrote: »

So you need to have had previous credit for you to have a credit history.

That's right, that's why it is called a credit history

masscrazy wrote: »

So someone who hasn't had the need to borrow in the past and has no debts will get no credit since they haven't got a borrowing history.

Not totally correct - they won't get the best credit.

See my reply to the OP - you start with sub-prime finance to build a history. They aren't so picky about who they accept (and charge insane APRs because of this).

Cthrower

Thanks for the useful info GB.

I'll get her to sort the electoral roll today and perhaps look into one of the credit building cards with Capital One or something.

She does use the Overdraft facility a little too often to be fair, I think we'll have to get her to stay out of that and get a credit building card in the interim.

You-kip

Cthrower wrote: »

Thanks for the useful info GB.

I'll get her to sort the electoral roll today and perhaps look into one of the credit building cards with Capital One or something.

She does use the Overdraft facility a little too often to be fair, I think we'll have to get her to stay out of that and get a credit building card in the interim.

My missis has been constantly overdrawn by a grand for 2 years and her bank lent her 7k so its more based on overall credit history as everyone's circumstances are different.

But you not being on the Elec Roll & having limited credit history wouldn't of helped.

CLAPTON

how does she earn

how much are her existing debts
how much is her current / recent overdrafts

how much does she want to borrow

shop-to-drop

Have you considered that the decline may be the right decision? If she is always needing to go into her overdraft could she really afford another payment each month?

If she can, get her on electoral role and apply again maybe when you have been in the current address over 12 months.