Wonga loans

gh4662

How damaging are Wonga loans on a credit file?
Went through a sticky patch last year after having to move rented accommodation at short notice so needing huge deposit, moving fees etc, had a few Wonga loans over a period of three months value each was £1000, all were paid off on time.

Apart from these I have a perfect file, several credit cards, everything paid on time, no defaults etc. However I applied for a mortgage and my broker believes the only reason I didn't get acceptance was because of these loans as I am in a well paid job.

Am I screwed because of the Wonga loans? As Both Wonga and Experian advertised how pay day loans could improve your credit rating do I have any recourse because clearly they do not?

gh4662

And before anyone asks why I didn't approach my bank, Wonga could transfer the money at 5pm on a Saturday, my bank was shut.

scrimper88

From what iv read a lot of mortgage lenders will turn you down if youv had one in the last 12 months to 3 years as it shows you cannot manage your finances.
If you google payday loans and mortgages there's a lot of interesting articles about it.

gh4662

A lot of worrying articles via Google. Just posted to see about others experiences and if this was the case.

GingerBob_3

Do Wonga and the rest of them actually report "positive" data to the CRAs? In other words, if you paid up on time, will it appear at all?

Tixy

I think most mortgage lenders will likely decline if someone has had a payday loan within the last 12 months.
Some lenders may be prepared to lend if the pdl's are older than this and if everything else is on file shows financial stability.

I don't believe you would have any recourse, you didn't take out the loan because you thought it would improve your chance of being accepted for future credit, you took it out because you needed it. I haven't actually seen experian suggest that payday loans increase your 'rating'. Some payday lenders do suggest it may improve a person's credit file - and in theory in some cases it could. If someone has absolutely no credit history at all then a successfully paid back payday loan may help them get accepted for other subprime credit.

Do Wonga and the rest of them actually report "positive" data to the CRAs? In other words, if you paid up on time, will it appear at all?

Most do report to at least one of the agencies, Wonga certainly does.

gh4662

Here is the link to Experian saying on their own site that payday loans can improve your rating


http://www.experian.co.uk/consumer/questions/askjames246.html


If you repay the payday loan on time and in full then any effect on your credit rating could be positive. When lenders check your credit report they are looking for evidence that you are a responsible borrower. Repaying a payday loan on time and in full should therefore strengthen your case, because many payday and other short-term loan providers are now sharing customer records with Experian

redcard

gh4662 wrote: »

Am I screwed because of the Wonga loans? As Both Wonga and Experian advertised how pay day loans could improve your credit rating do I have any recourse because clearly they do not?

You improve your credit rating with Wonga if you take a loan out with them and pay it back as expected. Wonga will want to give you another loan ASAP.

So the advertising is clearly 100% accurate.

GingerBob_3

redcard wrote: »

You improve your credit rating with Wonga if you take a loan out with them and pay it back as expected. Wonga will want to give you another loan ASAP.

So the advertising is clearly 100% accurate.

Then again, it's 100% false, depending on how you interpret it.

These days, of course, many lenders, especially mortgage providers, are looking for any excuse not to do business with you. Having borrowed money from a payday lender is clearly one such reason. Best to steer clear of them, not because of what they are, or the rates they charge, simply because they report to the CRAs.

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I just read the stuff from Experian. I wonder if Experian categorise payday lenders differently from banks and the like? Other potential lenders don't see the identity of reporting lenders (so we are led to believe) so how do they know you've borrowed from a payday lender. Maybe they assume it based on loan term? Maybe this is why, as some posters have reported, when applying for a mortgage you now have to furnish your own copy of the credit report.

redcard

GingerBob wrote: »

Then again, it's 100% false, depending on how you interpret it.

These days, of course, many lenders, especially mortgage providers, are looking for any excuse not to do business with you. Having borrowed money from a payday lender is clearly one such reason. Best to steer clear of them, not because of what they are, or the rates they charge, simply because they report to the CRAs.

It's 100% accurate.

They don't say it will improve your credit rating, they say it could improve your credit rating. And it definitely improves your internal rating with Wonga.

GingerBob_3

redcard wrote: »

It's 100% accurate.

How about we agree it's 100% misleading?