excellent credit rating but refused a loan. What's the point?

angie1979

Hi,

My friend is in a right pickle at the moment. she is trying to consolidate her credit card of £8000 and to buy a new car needing a further £7000, so in total needing a £15,000 loan. She tried Sainsburys which has the cheapest rate at the moment. Her credit score was in excellent. She earns £30k a year with no major bills other than the above.
Sainsburys turned her down. This meant her credit rating now went to good rather than excellent. She called experian as she pays monthly for this service in the hope that they could inform her why she was refused credit, however they were not able to tell her the reason as they didn't know why. Shouldn't this be part of the service to tell her why?

On their site they recommend loan companies who you have a good chance of getting a loan with and would you believe it Sainsburys was on this list. Why is she paying for this service with experian if they are not helping her keep a good credit score. What's the point of having a good credit score if your still going to be turned down for credit. Am I missing something here?

Shouldn't there be more rules and regulations put in place to stop your credit score going down for companies who clearly are not interested in giving the rate they have stated?
Just wondering how she is meant to get a loan now without paying astronomical costs.

Any suggestions would be very welcome

[Deleted User]

The credit score is neither here not there, as unfortunately Experian don't lend money.

She needs to check the detail on her files is correct. Everything else is then down to the lender's critiera. Experian don't know these critiera, hence their general approach of 'everyone's got a great credit score'.

Based on your post, affordability looks the most likely reason for the decline, already having £8k of debt and now wanting another £15k, even if it is to consolidate the 8k. It's generally considered too much on a 30k income.

angie1979

but if the £15k is to pay off the £8k credit card would this still not make a difference?

[Deleted User]

Not unless all the debt is with the same lender (where they could pay off the first loan themselves), as they can't prevent her from running out and having a £15k night out, and being stuck with 22k of debt and a hangover.

angie1979

Well it's not looking very good for her then! Maybe she should go out and get drunk she might feel better for a little while! Thanks for your help.

R34GTT

She could try applying for a balance transfer card to shift the credit card debt on to zero percent interest and get it cleared as soon as possible.

The same day she could also try applying for a zero percent on purchases card with a different provider and use that to buy a car, but not a £7k car! Get decent car for £2-3K instead.

She may not get accepted for any or both cards and clearly careful budgeting is required to ensure the debts are both paid off during their interest free periods.

Pixie5740

Good question, why is your friend wasting her money on a pointless Experian credit score? Get her to cancel this subscription, she could use the money to start paying off her credit cards rather than trying to get a loan and start the vicious cycle of debt consolidation.

angie1979

I have asked her to move her credit card to 0% balance but she said she already tried to do this but didn't have much luck, but think it could be worth a try again. And yes maybe it would be worth looking to get the car on 0% card as well, as you say maybe not £7k. It's a shame she doesn't have more time in her favour. Her current car had a major defect and to fix it was more than the car was worth and she had outstanding loan on it. She had to sell it cheaply, and now desperately needs a reliable car. Ouch!! Honestly as if it can get much worse!

dealer_wins

angie1979 wrote: »

Hi,

My friend is in a right pickle at the moment. she is trying to consolidate her credit card of £8000 and to buy a new car needing a further £7000, so in total needing a £15,000 loan. She tried Sainsburys which has the cheapest rate at the moment. Her credit score was in excellent. She earns £30k a year with no major bills other than the above.
Sainsburys turned her down. This meant her credit rating now went to good rather than excellent. She called experian as she pays monthly for this service in the hope that they could inform her why she was refused credit, however they were not able to tell her the reason as they didn't know why. Shouldn't this be part of the service to tell her why?

On their site they recommend loan companies who you have a good chance of getting a loan with and would you believe it Sainsburys was on this list. Why is she paying for this service with experian if they are not helping her keep a good credit score. What's the point of having a good credit score if your still going to be turned down for credit. Am I missing something here?

Shouldn't there be more rules and regulations put in place to stop your credit score going down for companies who clearly are not interested in giving the rate they have stated?
Just wondering how she is meant to get a loan now without paying astronomical costs.

Any suggestions would be very welcome

See the bit ive highlighted. That suggests that she is already living beyond her means. A further loan doesnt seem wise to me, I would advise your friend to start saving up for her new car.

AFK_Matrix

As dealer wins has said she needs to start looking at what she is living on as 30k is more than enough to live on. You don't say if she has kids etc but still 30k should be fine.

Get her to sign up here and do an SOA on the debt fee wannabe section. She could hopefully make some savings and then start snowballing her debt.

lee111s

You can get a reliable car for less than £2000. She needs to be looking at the likes of VW, Audi, Skoda etc (Vag group). They're all pretty bulletproof providing they have been maintained and should something go wrong, parts are cheap as there are plenty of them around.