Credit Scoring, what are the numbers...

Minx1986

meer53 wrote: »

If you've been refused a bank account and a personal loan, it's highly unlikely you'll get a consolidation loan from anyone. Your score is meaningless. Lenders don't look at scores. They look at your credit history.

Sorry, you've confused me. I applied for First Direct a little while ago, because of the incentive to move. I know they have their own system and so wasn't too worried when they rejected me. I then applied to Sainsburys for the Personal Loan, to use it as a way to consolidate.

I had no intention of applying for a third 'item', I didn't realise a Personal Loan and Consolidation Loan were different. Have I messed up here, applying for the wrong thing in the first place then?

Candyapple

Minx1986 wrote: »

Sorry, you've confused me. I applied for First Direct a little while ago, because of the incentive to move. I know they have their own system and so wasn't too worried when they rejected me. I then applied to Sainsburys for the Personal Loan, to use it as a way to consolidate.

I had no intention of applying for a third 'item', I didn't realise a Personal Loan and Consolidation Loan were different. Have I messed up here, applying for the wrong thing in the first place then?

There is no such product called 'consolidation loan'. There are only loans, what you use the loan for is generally what people call it e.g car loan, holiday loan or in your case you wanted to take out a loan to pay off your debts which is also called consolidation, hence consolidation loan.

As stated above, do you earn £80k or more? If not, you may want to post on the DFW board for ideas on how to cut your budget to clear your debts as you won't be getting a loan for anything anytime soon by the looks of it.

Minx1986

Candyapple wrote: »

As stated above, do you earn £80k or more? If not, you may want to post on the DFW board for ideas on how to cut your budget to clear your debts as you won't be getting a loan for anything anytime soon by the looks of it.

If I clear my debts, I won't be needing a loan. I am trying, guess i'll just have keep doing it slowly and accept that I'm stuck on the higher rate for the duration

Tixy

Minx1986 wrote: »

If I clear my debts, I won't be needing a loan. I am trying, guess i'll just have keep doing it slowly and accept that I'm stuck on the higher rate for the duration

How long is the loan forecast to last?
If you have been declined recently then I would hold off on any more applications now, but it would be worth trying again in perhaps another year once you have reduced the amount owing.

It can sometimes even be worth speaking to your own lender to see if they can refinance the existing debt at a better rate. The benefit of your own bank is that they don't have to factor in the risk of not repaying the existing loan unlike all other lenders, so it can be easier to pass their affordability calculations. It does sometimes work for some people as their loan balances decrease and they fall in to a lower tier of lending.

Minx1986

Tixy wrote: »

How long is the loan forecast to last?

I have another 38 months on it. Have paid 22 already.

Tixy

Minx1986 wrote: »

I have another 38 months on it. Have paid 22 already.

In general interest rates are often higher on loans over £15k compared to loans £7.5-£15k. As the balance is now under £15k it could be worth you asking your bank if they are able to refinance the loan at a better APR.

Best to do this in branch so you can make it clear this is not additional credit or any increased risk for them. It may be a no, but nothing to lose from asking.

Thrugelmir

Minx1986 wrote: »

If I clear my debts, I won't be needing a loan. I am trying, guess i'll just have keep doing it slowly and accept that I'm stuck on the higher rate for the duration

Consolidation loans provide the answer not the solution. Interest rates reflect the risk to the lender of losing money. Not you specifically that will default but people that have been offered the same product.

Suggest you get over the Debt Free Wannabe board. Plenty of advice and support over there. You'll also realise how tightly some people budget in order to repay their debts.