Refused finance - mortified!

DH1983

So last night I found myself in a furniture store. Totally unplanned and found a sofa I liked. Needed one for a while and as it was 4 years interest free finance I thought why not?
So when I got home I tried to arrange this finance only to be refused. ( I have never been refused anything following a credit check before) Mortified is not the word! It totally ruined my night!
Turns out I don't have good credit as
A. I've just opened a new bank account
B. I've never repaid a debt before ( because I haven't had any apart from current hire purchase)
C. I have a hire purchase car.

I just wanted to know if this is a common occurrence and to warn others as I had no idea these 3 things would knock your credit rating!

Does anyone know how long it will take before the new bank account doesn't factor any more?

Buzby

Far more than 3 things are used. Are you on the Eoectoral Register? If you have no defaults, then this is a plus - it ain't as simple as you believe, and who advised you those '3 things' were what the reasons for rejection were?

DH1983

Yeah I'm on the roll
I went on Experian
I feel like I'm being penalised for keeping my nose clean all my life
Would taking out a small loan now and paying it back boost my rating?

CLAPTON

DH1983 wrote: »

So last night I found myself in a furniture store. Totally unplanned and found a sofa I liked. Needed one for a while and as it was 4 years interest free finance I thought why not?
So when I got home I tried to arrange this finance only to be refused. ( I have never been refused anything following a credit check before) Mortified is not the word! It totally ruined my night!
Turns out I don't have good credit as
A. I've just opened a new bank account
B. I've never repaid a debt before ( because I haven't had any apart from current hire purchase)
C. I have a hire purchase car.

I just wanted to know if this is a common occurrence and to warn others as I had no idea these 3 things would knock your credit rating!

Does anyone know how long it will take before the new bank account doesn't factor any more?

on the electoral roll
what is your current level of debt?
what is you income?

bad idea to close the old current a/c but too late now
open a CC and use sensibly i.e. use every month, pay in full (preferrably with a DD so you never forget.

rizla_king

Experian guesses at negative factors that could lead to refusal are just guesses. Ignore them as could be nothing of the sort. Only the lender knows what their criteria or scoring model says, and even if you ask them they may know no more apart from "computer says no".

Hazzinho

Debt to annual salary needs to be less than 50% or you are deemed high risk. Also no credit then no credit history, lenders like to see you have a history of managing credit, they are much more selective these days so we don't have a repeat of 2008.

DH1983

I think the main reason is the new account
My old one is still up and running and has been since I was born!
The hire purchase is £8k and I earn £23k
I have no other debt
I use my credit card occasionally but always pay it back before interest is charged.

DH1983

Hazzinho wrote: »

Debt to annual salary needs to be less than 50% or you are deemed high risk. Also no credit then no credit history, lenders like to see you have a history of managing credit, they are much more selective these days so we don't have a repeat of 2008.

So you think taking a small loan is good idea?

CLAPTON

DH1983 wrote: »

I think the main reason is the new account
My old one is still up and running and has been since I was born!
The hire purchase is £8k and I earn £23k
I have no other debt
I use my credit card occasionally but always pay it back before interest is charged.

worth checking all three of the credit files in case something is amiss

start using your credit card regularly each month (say for petrol) and pay in full each month after you receive the bill

Archi_Bald

£8K debt on a £23K salary is quite a lot. In addition, your CC limit will show as available credit, and even if you don't have an agreed overdraft on your current account, it will be seen as a further credit facility.

The lender you applied with most probably decided that they are not prepared to extend further credit to you because of your existing debt / credit facilities.

Archi_Bald

DH1983 wrote: »

So you think taking a small loan is good idea?

If you could get one, it would just add to your existing debts and credit utilisation.