Car Finance declined - no idea why ?

Runnybabbit

Hello All

Apologies, possibly posted on wrong board so copied and pasted here :-


Wonder if anyone can enlighten me please ? Background info as follows :

17 yr old DD passed her driving test - she has a permanent job and earns a good wage. Since she is 17 she cannot apply for credit so we are doing this on her behalf and she will pay us back on a monthly basis. She's good with money so I know there will be no problem paying this back.

We have moved house twice in the past 12 months. We sold the family home 12 months ago, (after living there for 14 yrs) and currently renting until we find the house we want to buy.

Last November DH applied for credit on my new car (as I was taking a work break due to poor health). Finance approved so no worries there.

DH applied for credit on DD car yesterday which has been declined.

I now have a permanent full time job, so credit is better than before (as he will be linked with me).

When he applied for finance for DD car, he omitted the previous address where we had lived for 6 months, and had used the 14 yr address instead.

Question :

1. Because DH had omitted the 6 month previous address, would this be a reason to decline finance ?

2. What now happens to his credit rating ?

3. Will the finance company run another check to include the 6 month previous address, is this likely to be declined again and will this leave a 2nd footprint on his credit file ?

We are worried about this as we may be needing a mortgage offer soon and DD needs her car to progress with her job.

(as per previous advice on other board, will be checking credit reports but wonder if anyone can throw any light on this) ?

Many thanks for all your help

gardner1

Runnybabbit wrote: »

Hello All

Apologies, possibly posted on wrong board so copied and pasted here :-


Wonder if anyone can enlighten me please ? Background info as follows :

17 yr old DD passed her driving test - she has a permanent job and earns a good wage. Since she is 17 she cannot apply for credit so we are doing this on her behalf and she will pay us back on a monthly basis. She's good with money so I know there will be no problem paying this back.

We have moved house twice in the past 12 months. We sold the family home 12 months ago, (after living there for 14 yrs) and currently renting until we find the house we want to buy.

Last November DH applied for credit on my new car (as I was taking a work break due to poor health). Finance approved so no worries there.

DH applied for credit on DD car yesterday which has been declined.

I now have a permanent full time job, so credit is better than before (as he will be linked with me).

When he applied for finance for DD car, he omitted the previous address where we had lived for 6 months, and had used the 14 yr address instead.

Question :

1. Because DH had omitted the 6 month previous address, would this be a reason to decline finance ?

2. What now happens to his credit rating ?

3. Will the finance company run another check to include the 6 month previous address, is this likely to be declined again and will this leave a 2nd footprint on his credit file ?

We are worried about this as we may be needing a mortgage offer soon and DD needs her car to progress with her job.

(as per previous advice on other board, will be checking credit reports but wonder if anyone can throw any light on this) ?

Many thanks for all your help

if your not on the electoral register you will not credit

Runnybabbit

gardner1 wrote: »

if your not on the electoral register you will not credit

We are registered on electoral register - would the fact that he didn't put the previous 6 month address possibly be the problem ?

Hazzinho

You've just applied and got credit for another car recently, you need to be on the electoral roll but the main reason may be the level of debt. Your debt level should be less than 50% of you annual gross salary, my guess is 2 cars alone would push you over this threshold? Debt over 50% of your annual salary makes you high risk to lenders. You should include the 6 month address but I doubt this will be the issue to be honest.

Hazzinho

Also check your £2 credit files with Experian, Equifax and CallCredit (also has Noddle which is free), that might raise issues you were not aware of, perhaps the electoral roll isn't showing on you file. Always check you files before applying for credit.

Runnybabbit

Hazzinho wrote: »

You've just applied and got credit for another car recently, you need to be on the electoral roll but the main reason may be the level of debt. Your debt level should be less than 50% of you annual gross salary, my guess is 2 cars alone would push you over this threshold? Debt over 50% of your annual salary makes you high risk to lenders. You should include the 6 month address but I doubt this will be the issue to be honest.

I never knew that ! - thanks for that information. My car was £6k new and DD 's car is £8k new - which is less than 50% of DH salary. Its close to but not over.

We have had 2 credit checks for the rented property (2 in 12 months) , 1 for my car, 1 for a mobile phone (which was declined as electoral register had not been updated) and now this one which was declined. So I'm guessing this could also be the reason ?

Hazzinho

Can't tell from your response but it would need to be £6k +£8k is less than 50% of his gross salary, plus any credit card debt etc. Lenders add your total debt to the loan amount, if it's over 50% you are high risk. Also numerous credit applications in a short space of time go against you.

matttye

Rather than buy a new car why not get a decent used car? £1-1.5k is plenty for a decent used car. She could even save for that herself if she's good with money!

Insurance will be cheaper and statistically 1 in 5 drivers have an accident within their first year of driving. It's not necessarily people being irresponsible, just a lack of experience.

Additionally, for the first two years drivers can only get 6 points before they lose their licence. If this happens she'll need to get a new provisional and resist both tests.

I guess I'm saying, is it worth giving a brand new driver a brand new car to drive when the odds are stacked against them?

DCFC79

No need to spend 8k on a car for her, you can get decent cars for like 2k.

izools

gardner1 wrote: »

if your not on the electoral register you will not credit

Funny that, what with Barclaycard giving me a £10,000 line of credit without asking for ID despite my not being on the ER.

And no, I don't hold any other accounts with Barclays.

izools

matttye wrote: »

statistically 1 in 5 drivers have an accident within their first year of driving

Does it count as an accident if no one saw you and you didn't break anything?