Is it worth trying other lenders after being accepted by one?

Vism

Hi all,

Just been accepted for a loan with Sainburys but at a higher rate than I would like (5.1% not 2.7% as advertised). Not sure why as my credit record is excellent. Maybe self employed is the issue (for a long time).

I know there are minor differences in banks lending criteria but I wonder if it's worth applying to others to see if I can improve the rate. The downside would be the hard searches on my credit file.

Is it likely to be worth the effort?

Thanks.

[Deleted User]

I'd try one more. But maybe use an eligibility checker to make sure you target the best one.

Vism

Just tried M&S as it has a checker without hard search.

Headline rate of 2.8%, offered rate 5.8%. Seems to be a trend.

No idea what the problem is. Stayed the same regardless of salary, employment type and term.

BoGoF

Only 51% will get the headline rate

DCFC79

The 5.1% & 5.8% are very good rates, I zgree not as good as the 2.7 or 2.8%, could be worse as you could be offered higher rates.

Vism

I'm wondering if anyone has insight into how these rates are calculated.

For example.
I have no loans on my credit record (6 years of on time mortgage though)
I had a new bank account a while back but the history of my previous is still there.
I only have 1 credit card, I use it rarely and when I do, I pay it off.

Do any of those affect the rate given or is it a case that they've already given 51% of borrowers the good rate and no more is available?

Any ideas, someone must have some insider knowledge?

[Deleted User]

It's based on risk, and the risk criteria used will vary by lender.

Insufficient income, poor repayment history, lack of credit experience, excessive existing credit are just a few reasons why someone may be declined or given a higher rate.

The acceptance rate will also be monitored - if it's lagging 51%, it's easier for poorer quality applicants to be accepted, and vice versa.

Vism

I understand the basics, they don't apply in my case.

Last bit may be the issue.

Anyone else?

MallyGirl

Deleted_User wrote: »

It's based on risk, and the risk criteria used will vary by lender.

Insufficient income, poor repayment history, lack of credit experience, excessive existing credit are just a few reasons why someone may be declined or given a higher rate.

The acceptance rate will also be monitored - if it's lagging 51%, it's easier for poorer quality applicants to be accepted, and vice versa.

your history seems quite sparse - on the basis of what you have mentioned. That could be enough

Vism

Not really. 6 years of mortgage, phones, bank accounts and credit cards.

BoGoF

You just said you used your credit card rarely. Having bank accounts is not demonstrating credit use.