Refused a loan - why?

Ryaen

I'm not entirely sure whether this should be here or in the credit file forum.

Either way, I'll start.
I'm a self-employed web developer, contracting currently and likely to turn over somewhere in the region of £40,000 this year. I should point out I've missed one single payment in my life, on my Barclaycard. Apart from that I've never missed a payment. My credit report shows;

- Three credit cards (Two paid off in full every month, one with about £2,000 on it)
- Two Mobile Phone contracts (personal and business)
- One Broadband contract
- A Hitachi capital finance agreement from when I had laser eye surgery - it was practically zero APR so why not?
- Another Hitachi capital finance agreement for my business computer - this is a deferred payment and will be paid off long before any finance agreement actually starts.
- A HP agreement on my old car, this shows a balance of £2,944 despite being fully paid off. Out of 48 monthly payments, 20 of them have a 'NR' status (Not Reported). What on earth is going on here?!

My brother needed a car, and I'd just finished paying finance on mine, so I suggested he buy it and I'd treat myself to an upgrade.

I applied for a personal loan to make use of the low APR, also to ensure I owned the car rather than a finance company.
My bank said they could not take into account dividends, so they had to assume my yearly income was £10,600 (income before tax) - DESPITE being MY OWN bank and clearly seeing that more than that amount had gone through the account in the last 3 months.. :mad: - needless to say it was rejected.

I then tried a car finance company, Zuto - the best they could get for me was a huge 13.2% APR over 4 years (on approx. £9,000). After applying for that as I saw no other option and needed a car for business I was rejected, except for one company who said they would be happy to lend me the money on 32% APR.

I'm at my wit's end, so if anyone has any advice on what to do, or could answer the questions below I'd appreciate it.

1. Zuto's 32% APR - How on earth is that considered 'responsible lending'? They're basically claiming I will be a payment risk over the payment period, so in order to accommodate this they're hiking up the APR to make it even harder for someone to make the payments - WHAT? :mad:
2. What can I do about the previous car finance company not updating the account? Are other lenders seeing that and assuming I've already got a HP agreement with another company even though I no longer do? Is this affecting my applications?
3. Do I need to apply to a specialist self-employed lender? I feel I'm being completely and utterly victimised here. I fully understand how self-employed persons may be considered higher risk, but with the redundancy rates recently - is that actually even true?!
4. Please see my credit below, it seems to be better than average? What is it that is seen as unlendable about me? Do I have too many lines of credit possibly?

Many thanks in advance people, I'm genuinely frustrated and despondent. It's like my entire integrity is in question.

DCFC79

Ryaen wrote: »

I'm at my wit's end, so if anyone has any advice on what to do, or could answer the questions below I'd appreciate it.

1. Zuto's 32% APR - How on earth is that considered 'responsible lending'? They're basically claiming I will be a payment risk over the payment period, so in order to accommodate this they're hiking up the APR to make it even harder for someone to make the payments - WHAT? :mad:
2. What can I do about the previous car finance company not updating the account? Are other lenders seeing that and assuming I've already got a HP agreement with another company even though I no longer do? Is this affecting my applications?
3. Do I need to apply to a specialist self-employed lender? I feel I'm being completely and utterly victimised here. I fully understand how self-employed persons may be considered higher risk, but with the redundancy rates recently - is that actually even true?!
4. Please see my credit below, it seems to be better than average? What is it that is seen as unlendable about me? Do I have too many lines of credit possibly?

Many thanks in advance people, I'm genuinely frustrated and despondent. It's like my entire integrity is in question.

Who knows why you were declined, well people might have a guess as to why.

Different lenders will have target markets who they lend to or offer decent rates, eg maybe Zuto don't lend to the self employed.

Although its bright and colourful your public scores and the scores/ratings have no bearing on you being accepted for a loan. All the scores do/show you is how the reference agencies see your credit history but they aren't lenders so are as useful as a chocolate teapot.

What matters is whats in your credit file

Gaz83

You say you turnover £40,000 a year. You make no mention of how much profit you make.

Lenders don't publicise their lending criteria, and they don't have to give an explanation for why the decline someone.

Sounds like you need to get that HP thing sorted out, though.

The scores don't matter.

Tixy

A NR status should not have a negative impact on your credit file, however if it shows as though there is still an outstanding balance and a monthly financial commitment then this would be taken in to account by a potential lender. So I'd definitely be chasing that lender to update your files to show that the debt is fully paid.

You don't say how much your total outstanding debts are, which could be a factor.
Or what your current total income is (rather than turnover).

How many recent applications have you made (in the last couple of months). Lots of applications on your files in a short space of time will make you progressively more likely to be declined.
As zuto are a broker it is possible that several companies will have performed credit searches on your credit files.

It might be worth getting a copy of your experian file if you haven't to check that all information on that is correct and nothing negative is showing.

In terms of the offer through the broker, lenders all have different risk profiles and prices, and the one who was prepared to lend to you is obviously a company with a bigger appetite for risk but with higher prices. The cheaper lenders have obviously decided that for them your circumstances are too high risk.

CLAPTON

Ryaen wrote: »

I'm not entirely sure whether this should be here or in the credit file forum.

Either way, I'll start.
I'm a self-employed web developer, contracting currently and likely to turn over somewhere in the region of £40,000 this year. I should point out I've missed one single payment in my life, on my Barclaycard. Apart from that I've never missed a payment. My credit report shows;

- Three credit cards (Two paid off in full every month, one with about £2,000 on it)
- Two Mobile Phone contracts (personal and business)
- One Broadband contract
- A Hitachi capital finance agreement from when I had laser eye surgery - it was practically zero APR so why not?
- Another Hitachi capital finance agreement for my business computer - this is a deferred payment and will be paid off long before any finance agreement actually starts.
- A HP agreement on my old car, this shows a balance of £2,944 despite being fully paid off. Out of 48 monthly payments, 20 of them have a 'NR' status (Not Reported). What on earth is going on here?!

My brother needed a car, and I'd just finished paying finance on mine, so I suggested he buy it and I'd treat myself to an upgrade.

I applied for a personal loan to make use of the low APR, also to ensure I owned the car rather than a finance company.
My bank said they could not take into account dividends, so they had to assume my yearly income was £10,600 (income before tax) - DESPITE being MY OWN bank and clearly seeing that more than that amount had gone through the account in the last 3 months.. :mad: - needless to say it was rejected.

I then tried a car finance company, Zuto - the best they could get for me was a huge 13.2% APR over 4 years (on approx. £9,000). After applying for that as I saw no other option and needed a car for business I was rejected, except for one company who said they would be happy to lend me the money on 32% APR.

I'm at my wit's end, so if anyone has any advice on what to do, or could answer the questions below I'd appreciate it.

1. Zuto's 32% APR - How on earth is that considered 'responsible lending'? They're basically claiming I will be a payment risk over the payment period, so in order to accommodate this they're hiking up the APR to make it even harder for someone to make the payments - WHAT? :mad:
2. What can I do about the previous car finance company not updating the account? Are other lenders seeing that and assuming I've already got a HP agreement with another company even though I no longer do? Is this affecting my applications?
3. Do I need to apply to a specialist self-employed lender? I feel I'm being completely and utterly victimised here. I fully understand how self-employed persons may be considered higher risk, but with the redundancy rates recently - is that actually even true?!
4. Please see my credit below, it seems to be better than average? What is it that is seen as unlendable about me? Do I have too many lines of credit possibly?

Many thanks in advance people, I'm genuinely frustrated and despondent. It's like my entire integrity is in question.

what do your credit files show as your debts?

Thrugelmir

Ryaen wrote: »

- DESPITE being MY OWN bank and clearly seeing that more than that amount had gone through the account in the last 3 months.. :mad:

So what? Cash being churned through a bank account is a meaningless measurement of absolutely no value.

jonesMUFCforever

One word response -AFFORDABILITY.

Pixie5740

Turnover is vanity. Profit is sanity. Cash is reality.

As others have pointed out the credit scores and meaningless. You don't have a universal credit score. Lenders don't use these numbers so don't waste your money paying for them.

Until recently I was self employed and I managed car finance from a dealership no problem at all. I only took the finance out to get a discount on the car and if I remember correctly it took about a month to show up as settled on my Noddle credit file.

I had tried to get a personal loan at some point but found it difficult because I wasn't a home owner at the time. It wasn't a big deal and certainly not worth getting worked up about. I didn't feel victimised and I could probably have got a loan from somewhere with a crap APR because I was seen as a higher risk. I just saved up in the end which was probably the better option in the long run.

chanz4

how can x3 agencys scores be the same, they don't use the same score cards

AndyT678

Ryaen wrote: »

My bank said they could not take into account dividends, so they had to assume my yearly income was £10,600 (income before tax

Ah, the familiar lament of the self-employed tax dodger. No that's not my REAL salary that's just what I tell the tax man!

Tixy

chanz4 wrote: »

how can x3 agencys scores be the same, they don't use the same score cards

Those public scores are checkmyfile scores (based on the public data from the 3 agencies not scores created by the agencies themselves).
Yet more secondary, near pointless interpretations by checkmyfile.