Help needed for credit check issue

rms1

Firstly can I say that I wasn't sure where to post this so I have put it on 2 forums so forgive me if you see this twice.

My mortgage term with the Halifax is coming to an end in October. We at first thought about moving but decided to stay put.

I have just been accepted for a new mortgage for 150k with another society, this is now going through and the transfer should take place within 10 days.

The plan now was for me and my wife to now borrow 20K for some home improvements.

I know that we have a good credit rating (never any judgments etc) and never been refused credit or credit cards. We do have some credit cards with small balances that we usually clear on a monthly basis. I don't owe any more money and have no other loans.

I have a Santander 123 account so I just applied for a Santander personal loan on the telephone. Before the application was put through, I was quoted a rate of 3.54% over 60 months. My disposable income was more than enough to cover the loan.

I then went through the long application which came back accepted but on a much higher rate of 9.6% which is of course unacceptable.

The only reason I can think of for this happening is that I still have the 157k outstanding with the Halifax although this will be cleared within the next few weeks and my recent application for the new mortgage will be on file.

The problem I have now is that the application for the 20k today will be on my file. I am guessing that this might compromise any further applications. I don’t know what to do; I feel that making further applications will just make matters worse.

Any advice would be appreciated.

[Deleted User]

I would try one more application elsewhere - but only once the remortgage has taken place. If that doesn't work out, then leave it for a few months.

Ignoring any credit rating you may have been told you have, 20k is a large sum which they will have measured against your income (among other things). Also the fact you don't always clear your cards each month would suggest you may not have sufficient disposable income for a further loan.

rms1

Deleted_User wrote: »

I would try one more application elsewhere - but only once the remortgage has taken place. If that doesn't work out, then leave it for a few months.

Ignoring any credit rating you may have been told you have, 20k is a large sum which they will have measured against your income (among other things). Also the fact you don't always clear your cards each month would suggest you may not have sufficient disposable income for a further loan.

Thank you for your reply, I am annoyed with myself for not waiting till the remortgage had taken place. The only reason I didn't wait was because I needed to book the builder as he already had a long waiting list and I felt I should have the money in place first. I don't think it is an affordability issue though.

National_Debtline

Each bank will run their own assessment on a credit application, so unfortunately, we cannot say for certain. However, from what you have described you will currently have an outstanding mortgage, plus the search for the new mortgage, plus the credit cards and the search for the loan. That may have all taken place over a short period of time which can sometimes be viewed as negative.


Once the new mortgage is dealt with you can look again, just be careful that the more searches you have the more damaging this can be (but they should only stay on your file for 12months). Banks will take into consideration your credit rating, plus affordability, possibly factoring in age if you are due to retire during the course of the credit, amongst other thing for this credit. I think the most important thing is to get your mortgage sorted and then take steps from there. Good luck,


Laura
@natdebtline

rms1

National_Debtline wrote: »

Each bank will run their own assessment on a credit application, so unfortunately, we cannot say for certain. However, from what you have described you will currently have an outstanding mortgage, plus the search for the new mortgage, plus the credit cards and the search for the loan. That may have all taken place over a short period of time which can sometimes be viewed as negative.


Once the new mortgage is dealt with you can look again, just be careful that the more searches you have the more damaging this can be (but they should only stay on your file for 12months). Banks will take into consideration your credit rating, plus affordability, possibly factoring in age if you are due to retire during the course of the credit, amongst other thing for this credit. I think the most important thing is to get your mortgage sorted and then take steps from there. Good luck,


Laura
@natdebtline

Thank you Laura, that is great advice. I have already declined the loan from Santander and I will look again after the mortgage is in place and things have settled down.