Representative Rate versus Offered Rate

Murray_T

My wife and I recently took out an unsecured personal loan from our bank. At the time the "Represenative Rate" quoted by the bank ws 3.5% but the loan we were offered, and subsequently took out, was at a lending rate of 9.9%. Subsequently, I checkd my credit score with Experian and it was perfect at 999. Therefore, I wondered why my loan rate was three times the "Representative Rate" and on what information about me the underwriters were working on. I have raised a formal complaint with the bank and the Financial Ombudsman Service but cannot get either to agree to give me a statement of what criteria has been used. I am not objecting to the rate per se but to the lack of transparency on how the lending decision was made.
Has anyone else found a similar problem with their bank and has anyone rasied this issue with the Financial Conduct Authority?
Many thanks.

[Deleted User]

They will use their own risk criteria. Additionally, only 51% of successful applicants need get the headline rate.

No one gets to see your 999 score.

Their criteria are confidential and won't be revealed to you.

DCFC79

Its dependant on various factors like your credit history (not the score) and the information you supplied on the application.

Your wasting the banks time and that of the FOS with the complaint.

You say wife are your accounts linked, maybe your wife has a chequered (not chequered but not as good as yourself Murray) credit history

Caz3121

Murray_T wrote: »

My wife and I recently took out an unsecured personal loan from our bank. At the time the "Represenative Rate" quoted by the bank ws 3.5% but the loan we were offered, and subsequently took out, was at a lending rate of 9.9%. Subsequently, I checkd my credit score with Experian and it was perfect at 999. Therefore, I wondered why my loan rate was three times the "Representative Rate" and on what information about me the underwriters were working on. I have raised a formal complaint with the bank and the Financial Ombudsman Service but cannot get either to agree to give me a statement of what criteria has been used. I am not objecting to the rate per se but to the lack of transparency on how the lending decision was made.
Has anyone else found a similar problem with their bank and has anyone rasied this issue with the Financial Conduct Authority?
Many thanks.

As long as the 3.5% is offered to 51% of successful applicants there are no rules broken
Each lender will have their own criteria for who gets declined, who gets the representative rate and who gets offered but for a different rate
If you do not like the rate offered you are perfectly within your rights to decline the loan and apply elsewhere where they may have different lending criteria.
Lenders do not share their criteria and they may even decide to decline you a loan which is their prerogative as it is their money

Gaz83

Murray_T wrote: »

I am not objecting to the rate per se but to the lack of transparency on how the lending decision was made.

Lenders aren't required to publicise their own internal lending criteria. If they did, then all that would happen is people would ensure they tailor their applications to meet what the lender would class as an ideal customer.

meer53

No one will give you the criteria, the FOS can't force them to give it to you either, you may as well just forget it and move on.

Murray_T

Do you if this is 51% of customers by number or 51% of total loan value?

[Deleted User]

Number. .

PeacefulWaters

In the good old days they'd have just declined you.

k3lvc

Murray_T wrote: »

Do you if this is 51% of customers by number or 51% of total loan value?

Does it matter ? It's not going to influence your complaint one way or the other.

For what it's worth I understand it's 51% of successful applicants

dumpyboy

I ve asked before has anyone seen data that 51 % of the people get , when I asked was told in was fca rules and banks obey them, and as we know no banker has ever broken the rules