Loan wrongly declined

welshwolf_2

Hello all,
I have a bit of a dilemma on my hands. Long story short, I decided to purchase a brand new car from a VW dealership. After putting down a deposit of £500 i was told that i was declined finance. My next option was to apply for a loan with Sainsburys which was also declined! Here are my circumstances:

I'm 27, earn £20k +, i have EXCELLENT credit ratings (checked with Experian after i found out i was declined), i have had car finance a few years ago which was all paid off fine, i have no credit cards, no debts, no mortgage (living with parents), no outstanding credit.

I suspect that i was declined credit because i share the same first and surname as my step-father (also same address) who has a poor credit rating (with a CCJ). I have tried to contact both finance providers to explain but they wont listen. Surely this can't be legal? Everything i have read online says that unless i am financially connected ie via a joint account (which i'm not) then they have to judge me on my own credit. I know for a fact that i have never had bad credit and any loans i have had (ie an iPad on finance) have always been paid off on time. Please help as i don't know what to do!

Thanks all!

shortcrust

welshwolf wrote: »

Hello all,
I have a bit of a dilemma on my hands. Long story short, I decided to purchase a brand new car from a VW dealership. After putting down a deposit of £500 i was told that i was declined finance. My next option was to apply for a loan with Sainsburys which was also declined! Here are my circumstances:

I'm 27, earn £20k +, i have EXCELLENT credit ratings (checked with Experian after i found out i was declined), i have had car finance a few years ago which was all paid off fine, i have no credit cards, no debts, no mortgage (living with parents), no outstanding credit.

I suspect that i was declined credit because i share the same first and surname as my step-father (also same address) who has a poor credit rating (with a CCJ). I have tried to contact both finance providers to explain but they wont listen. Surely this can't be legal? Everything i have read online says that unless i am financially connected ie via a joint account (which i'm not) then they have to judge me on my own credit. I know for a fact that i have never had bad credit and any loans i have had (ie an iPad on finance) have always been paid off on time. Please help as i don't know what to do!

Thanks all!

This probably isn't what you want to hear, but it's highly unlikely that they're confusing you with your stepfather. You've almost certainly been declined because you don't have any active credit accounts. Lenders like to see evidence that people can manage credit over the long term up to the present day. These days, no one is going to give a chunky loan to a borrower with a blank credit report. It might seem unfair, but rather than being a plus, having no credit cards actually goes against you. You'd be wise to get a credit card, use it and pay off in full every month. Give it 6 to 12 months and try again.

Also, despite what the agencies say there's no such thing as a credit rating. The numbers they generate are meaningless and aren't seen by lenders. Lender look at the details of credit report and use their own criteria to make decisions.

shortcrust

Affordability might be an issue as well. Somebody might correct me on this, but a salary of 20k doesn't sound a lot to me for a loan for a brand new VW.

Lioness_Twinkletoes

The loan hasn't been wrongly declined. The lenders chose not to lend to you. I would agree that the issues are affordability and lack of credit history. I'd start saving, if I were you.

PeacefulWaters

Borrow the money from the firm that tell you they rate you as EXCELLENT.

BillJones

I got turned down for a mobile phone contract a few years ago. It was before the crash, I was at the top of my earnings in the City, had a few credit cards which were used for spending and paid off in full, (available credit was about one month's wages, credit used was about an hour's pay), owned my home, and had no defaults or late payments, ever.

Sometimes some companies just make strange decisions. It was weird to be denied a contract phone, but that was that.

adindas

Same here.

I got declined for application of a new credit card, but at almost relatively the same time I got approved for another credit card even a better one.

I got declined for a new current account but at almost relatively the same time I got approved for another credit card even a better one.

Some people in this forum simply do not believe that human intervention and error still pay role in the credit application. There are still few incompetent, lazy people are working in financial sectors.

For the OP how difficult it is , but if you could find out why you have been declined.

It is true it could be because of history or salary, but you will need to find out why ...

BillJones wrote: »

I got turned down for a mobile phone contract a few years ago. It was before the crash, I was at the top of my earnings in the City, had a few credit cards which were used for spending and paid off in full, (available credit was about one month's wages, credit used was about an hour's pay), owned my home, and had no defaults or late payments, ever.

Sometimes some companies just make strange decisions. It was weird to be denied a contract phone, but that was that.

MABLE

In the old days it could depend on whether the bank manager liked you or not. In my case he did not and that was confirmed by his deputy.

Thankfully we now have credit scoring systems which make it fairer.

welshwolf_2

thank you all very much for your replies!

I suppose I can live with the fact that they have declined me based on my own credit (for some weird reason), but i just wanted to get clarification that they cant judge my finance record because of my parents poor credit history.

To tell you the truth, i still don't quite get it. I applied for £11k on finance for my last car via Vauxhall (about 5 years ago)which i paid off without incident. Now i'm asking for £18k and i'm on a higher pay than i was back then. I do have some finance records on file, so it's not as if my file is empty as such, although i've never had a credit card.

Do the loan company and the finance department of the dealership have to tell me why i was declined if i request that info?

Many thanks

[Deleted User]

welshwolf wrote: »

Do the loan company and the finance department of the dealership have to tell me why i was declined if i request that info?

Not specifically. They can just tell you that there is something on your credit file they didn't like or that you didn't meet their internal criteria.

Gaz83

welshwolf wrote: »

Do the loan company and the finance department of the dealership have to tell me why i was declined if i request that info?

Many thanks

No, they don't. It very much sounds like affordability, though.

A general rule of thumb these days is that mainstream lenders will consider lending about 50% of your annual salary. So for a loan of £18k you'd need to be earning about £36k before they'd consider it.