Why God, why?

takman

tain wrote: »

Yeah but at the same time, if you walked up to a nightclub 3 nights in a row and kept getting refused with no reason, you'd have the nark if you found out it was simply you were going 2 minutes after their last entrance each time.


Although these banks have absolutely no obligation to provide any information back to us on failed credit applications, that doesn't mean that in some instances it could be very beneficial to them to provide it. There is a difference between an obligation, and common sense. You can't algorithmise (sure, that's a word) common sense.

To expand on your analogy the nightclub may set a specific time because they know by past experience people who turn up after that are most likely to spend the least amount on drinks. If they told everyone what the time was then these people would end up going in earlier so they would be filling up the club with the least profitable customers.
So obviously they need to keep the time secret for it to be effective!.

It's a very crude analogy I know!

tain

takman wrote: »

To expand on your analogy the nightclub may set a specific time because they know by past experience people who turn up after that are most likely to spend the least amount on drinks. If they told everyone what the time was then these people would end up going in earlier so they would be filling up the club with the least profitable customers.
So obviously they need to keep the time secret for it to be effective!.

It's a very crude analogy I know!

Haha your point may be lost within the analogy! Because I'd be inclined to think that getting people in earlier is exactly what drives the additional profit they're looking for!


So for instance I might be refused a loan simply because of my length of time at work. But in 6 months time, the bank can be assured that I'm now a safer bet and in permanent secured employment. So their risk has been mitigated, and the profit from me is worth taking on.


If we're talking about risk, then it's good to let people know why they are a risk so they can change their habits or situation. Surely an ideal situation for banks is for there to never be any risk to their profits?


If we're talking about not being profitable, then that's a different ball game.

takman

tain wrote: »

Haha your point may be lost within the analogy! Because I'd be inclined to think that getting people in earlier is exactly what drives the additional profit they're looking for!


So for instance I might be refused a loan simply because of my length of time at work. But in 6 months time, the bank can be assured that I'm now a safer bet and in permanent secured employment. So their risk has been mitigated, and the profit from me is worth taking on.


If we're talking about risk, then it's good to let people know why they are a risk so they can change their habits or situation. Surely an ideal situation for banks is for there to never be any risk to their profits?


If we're talking about not being profitable, then that's a different ball game.

My thinking is more along the lines of you get rejected because you have to be in employment for atleast 18 months. You make a post on this forum about this fact, then someone sees it who has only been employed for 2 months and lies so that the application goes through. So they get more fraudulent customers.

They may then change their policy and decide they are happy to lend to people who have only been employed for 12 months. But less people are applying for the loan because they all think it's still set at 18 months minumim so they effectively lose customers.

So I think it's too risky for banks to release any information about their decision making process even though it may benefit some customers.

Thrugelmir

tain wrote: »

Yeah but at the same time, if you walked up to a nightclub 3 nights in a row and kept getting refused with no reason, you'd have the nark if you found out it was simply you were going 2 minutes after their last entrance each time.

The last entrance time is a variable though.

There's plenty of boys in the club so will only now admit girls.

Has the club reached capacity?

Has the air conditioning failed so the admitted numbers are restricted tonight?

Have entrance tickets been presold?

Tomorrow the criteria changes. The club has been inundated with applications for membership. Until these applications are fully vetted , temporary membership has been granted. Thereby restricting on the night door cash payers.

Algorithms are not static. They are constantly tweaked to market conditions, lenders appetite to lend, work volume in hand, etc etc

slink85

pvt wrote: »

You would be regarded as very far from being a poor customer. They make a turn of a couple of percent on every transaction you make on your card.

I spend about £30,000 p.a. on credit cards and never pay a bean in interest - I suspect my CC providers very much welcome the £500+ they're collecting off retailers through my business; so much so that they bung me a chunk of it as a backhander to entice me to spend even more.

more like fractions of a percent couple of percent indeed :rotfl:

boo_star

slink85 wrote: »

more like fractions of a percent couple of percent indeed :rotfl:

The "standard" fee for credit cards is around 3%.

Whilst some of it goes to the processors, a decent chunk goes to the card company, maybe 1%?

jeanangeo

I'm no expert on this (am still only just starting out handling my debt) but I have made a commitment to myself to handle this kind of pain by not ever needing credit (eventually).

I understand that no-one has a right to credit and of course lenders have to have some automated way of processing applications. That would be fine if each application didn't make the next application harder.

The way it works now is:

- guess the criteria
- fail for some unknown reason (or succeed but get offered a worse rate than advertised)
- try again but this time with a black mark against you

It's all very painful if you need new credit or a even just better rate on existing credit.

The thing is that the system isn't going to change just because I don't like it. I'm in a mortgage trap and there isn't much I can do about it.

However, once I'm done with my mortgage, I am going to save everything I have got. I am going to get myself in a position where I won't care about lenders criteria because I won't need their money. They can stick their secret criteria then .

Anyway, I feel your pain and wish you the best of luck.

mcpitman

tain wrote: »

I don't think it's as complicated and difficult as you've said though. Considering the technicalities that they've already overcome in assigning an algorithm to calculate these in the first place, more could be done. But it's easier not to.


I understand that in most cases, it's not a single thing that is causing the decline. But in others it could be a single point that edges them over, and often could be something they could change.


Although some things certainly will encourage fraud, many of them won't. Saying 'apply in 6 months time' is one that I can't see being fraud - the very notion of it can be measured, and the integrity of the initial claim is already at risk of fraud without the added line of 'you'll be ok in 6 months'.

I do understand your point, however with the large volume of applications and how easy it is to attract the right "profile" of customers to the lender, there is little to no return in advising the declined customer why it was declined.

It's simply a case of "decline" and move onto the next applicant who may be an "accept".

Again, I doubt any lender would tell you why they have declined as this information could be easily "fixed" and fraudulent applications rise.

In addition, if you were advised to try again in 6 months, and in 6 months you did re-apply but were declined, you would probably feel annoyed. However the decline could be for different reasons in 6 months time and so the cycle begins again.

JimmyTheWig

tain wrote: »

So for instance I might be refused a loan simply because of my length of time at work. But in 6 months time, the bank can be assured that I'm now a safer bet and in permanent secured employment. So their risk has been mitigated, and the profit from me is worth taking on.

The thing is, these things aren't black and white.
The bank knows that the longer someone has been in their job, the safer it would be to lend to them. What they want is people who have been in their jobs a long time.
They certainly don't want people who have been in their jobs a short time, so automatically reject anyone who has been in their job less than 6 months.
But someone who has been in their job for 6 months and a day, isn't that much safer than someone who has been there for 5 months and 29 days. By advertising their criteria it allows people to just slip under the net. It would encourage applications from people who only just meet the criteria. When what they want is people who easily meet the criteria.


A different scenario, but similar logic...
Lets say a bank publicises that cash deposits of £10,000 or more will be analysed for money laundering purposes.
A crook has £100,000 to launder.
They know that if they go to the bank 11 times and deposit £9,100 each time they will be safe.
Without knowing the criteria, the chances are they would either deposit too much in one go and get investigated or they would need so many trips to the bank it would be unworkable.

RedDwarf82

Experian_company_representative wrote: »

Hi RedDwarf82,

I'm sorry to read that you were not able to get the issue with your address format resolved during your free trial.

We will always query information that you think is recorded incorrectly on your report for you free of charge, even after a trial has ended.

I can take a look at your report for you to see what may be causing the issue, please [EMAIL="uksocialsupport@experian.com"]email [/EMAIL] your details (name, date of birth and address) to me so that I can investigate.

It is always the lenders decision as to whether they accept an application or not, but your full and correct information should be showing on your Experian report.

Kind regards
Neil

I am going to show you an issue with Credit Expert that doesn't depend on my specific data. Happens to everybody with a specific type of address so, if you don't mind, let's discuss it in public.

I look for a random address in http://www.royalmail.com/find-a-postcode that happens to be a flat, in a building that has a name. Let's take



I start the registration process in Credit Expert with fake data, but selecting the previous address

"Flat 5, Elan Court, 36 Newark Street, LONDON, E1 2AA"
(let's ignore here that when you select the address you can see it fully, which is not an example of great web design)




For some reason, after clicking on the address with the right format, the website shows

"36 ELAN COURT Flat 5 NEWARK STREET, LONDON, E1 2AA"




Which is kind of weird for you to do, but OK.

The funny think is that, if you follow the same pattern than with my address, after finishing the registration process and logging in for the first time you find out that the created Credit Expert account has YET ANOTHER format for that address.

Flat 5 36, ELAN COURT,
NEWARK STREET,
LONDON, E1 2AA

Now, I don't know the format that address is in the electoral register. But if if happens to be

"5 Elan Court, 36 Newark Street, London, E1 2AA"

(so like the Royal Mail PAF one, minus a "Flat" and a comma)

Credit Expert will create a credit report saying that person is not in the electoral register even if he is.

That's the equivalent format in the electoral register to the one for my address. But I guess the problem can happen with other formats.

Is the problem clear? How many people do you estimate it can affect in the UK? Why it has not been fixed when I (and probably others) reported it? When will it be fixed? What will be the fix*?

* I recommend letting people just use whatever format they want in Credit Expert. Not forcing them to select from a list of formats that don't match Royal Mail or the electoral register.