Refused finance - mortified!

DH1983

The £8k hire purchase is a just add fuel scheme and car will be going back in a year when the 3 years is up so I won't be paying the full 8.
I had no idea this would get me refused finance for a £20 a month sofa 2 years down the line
You live and learn
I'm now worried about being refused a mortgage.

suicidebob

Why not just use your savings to pay for the sofa?

SuperHan

Getting a loan is silly - it will cost money and be no more effective than getting a credit card!

Get a CC, use it and pay in full each month and that will show your ability to manage credit effectively.

shortcrust

suicidebob wrote: »

Why not just use your savings to pay for the sofa?

Getting the sofa doesn't seem to be the problem. The OP is concerned about why they were refused finance.

DH1983

Yeah I don't want a loan, just remember someone saying years ago that it was a good way of boosting your credit rating.
I always use my CC for holidays etc and if money is tight just before payday but then it is always repaid within the month. Had my statement the other day and I'd spent about 2.7k on it within the year and incurred no interest.

rizla_king

The why can only ever be guesswork. All you can do is follow the guides like the ones on this site and try to make yourself a bit more attractive to lenders. Even then you can be refused in odd cases when lenders have odd or very restrictive criterai.

Archi_Bald

DH1983 wrote: »

The £8k hire purchase is a just add fuel scheme and car will be going back in a year when the 3 years is up so I won't be paying the full 8.

This isn't information a lender's computer sees when reading your credit files. All they see is (probably) an £8K outstanding debt to a HP company. The details of your HP contract aren't held on your credit files. I don't know for certain but wouldn't be surprised if you also got additional risk points for simply using HP.

If you have the option to explain - e.g. to a mortgage advisor / their underwriter - that your £8K debts isn't really an £8K debt, they might accept your application. But if it's simply a computer running the numbers, it will just use the numbers it sees in your files.

~Brock~

You say you have checked your file with Experian.....

Whichever finance company actually declined you will be required to send you a written notification of the decision, including which credit reference agency they used, which may not be Experian.

The first thing to do should be to check with whichever agency they used if not Experian and see if anything different comes up.

Archi_Bald

~Brock~ wrote: »

Whichever finance company actually declined you will be required to send you a written notification of the decision, including which credit reference agency they used, which may not be Experian.

But don't expect the notification to tell you anything useful. No lender is obliged to reveal the detailed reasons for their decision.

backinbusiness

Bit of a big impulse buy tho?