Good credit but can't get a loan.

Moscow85

Hi there. I have recently applied for a loan of £6000 over 3 years to two different providers but both rejected my applications. I earn £20000 a year and only have £410 balance on a credit card and no other outstanding debt, no missed payment, nothing!! I have an excellent credit rating on experian so why do I keep getting rejected?

Any info or advice would be greatly appreciated, thanks.

[Deleted User]

You're the only person to see your excellent credit rating, so that won't help you.

Is the £410 a revolving balance - or are you clearing each month? Other potential reasons are short time in job, not on electoral roll, financial associates, lack of credit history or just plain old affordability.

Moscow85

What do you mean I am the only person to see my excellent credit rating? I thought lenders looked at credit rating when making a decision?

£410 is the current balance on the credit card and I make monthly payments greater than the minimum payment.

I have been in my current job for 2 years and was in my last job for 5 years.

I am on the electoral roll.

Financial associates?

I have provided a full credit history from when I was 18 years of age.

I believe it to be affordable but how do they decide if it is or not?

Are there any other hidden criteria that may be taken into account that I may not be aware of?

TadleyBaggie

Nope, the credit rating/score is a mostly made up number that the CRA's try to sell to you. Lenders get to see the credit file details and make up their own internal scoring based on it and other information (such as income data as provided on the application).

[Deleted User]

Lenders only look at the data on your file and make their own decisions from that. They don't see any score or grading.

Maintaining such a small balance may give them cause for concern. Unless it's on a 0% promo, you should be able to clear that balance in full. If you can't, they may wonder where you will find several hundred pounds more to service a loan.

You haven't said how much of a credit history you have - how long have you had the card? Have you had any other credit agreements in the past?

They will make assumptions around typical outgoings from your income to determine affordability - rent/mortgage. food, travel etc. They may also have criteria that you just don't meet - some lenders work target specific sub segments.

20aday

Moscow85 wrote: »

What do you mean I am the only person to see my excellent credit rating? I thought lenders looked at credit rating when making a decision?

£410 is the current balance on the credit card and I make monthly payments greater than the minimum payment.

I have been in my current job for 2 years and was in my last job for 5 years.

I am on the electoral roll.

Financial associates?

I have provided a full credit history from when I was 18 years of age.

I believe it to be affordable but how do they decide if it is or not?

Are there any other hidden criteria that may be taken into account that I may not be aware of?

Is your credit card the only line of credit you have?

If you've a limited credit history the lender won't know how likely you are to repay your debts etc.

Did you try your own bank?
Don't pay for your credit score but obtain your £2 stat. report from Experian and your free credit reports from both Noddle and Clearscore and see if there's any data on there being incorrectly logged.

Moscow85

Thank you all for your input. It has been very helpful and brought a few things to light that I wasn't aware of. I will have a look into the things that you have mentioned. Thanks again ����

Tixy

Moscow85 wrote: »

Financial associates?

Financial associates are other people who you have any joint credit history with, e.g. a joint bank account or joint mortgage.
If you have a financial associate that has negatives on their credit file this can be taken in to account by a potential lender.