Loan application rejected after successful soft search!

Dogwalkercouchpotato

Hi, first time poster trying to understand why a loan application has been rejected! I’ve just applied for an M&S loan for £15k for a new kitchen and bathroom. My credit report is completely clean, showing my mortgage account and a credit card that is paid off in full each month (these are the only two items on my report). I earn £40k per annum and the repayments are £370 per month. I carried out the soft check in the M&S website and it came back successfully offering me an interest rate if 2.8%, however my full application had been rejected! Any idea why? Are soft checks a complete waste of time? Thanks for your help!

[Deleted User]

They can be a little unreliable.

You didn't meet their criteria - could be as simple as you not being in their target market, or could be the large sum you were after.

YorkshireBoy

Dogwalkercouchpotato wrote: »

Hi, first time poster trying to understand why a loan application has been rejected! I’ve just applied for an M&S loan for £15k for a new kitchen and bathroom. My credit report is completely clean, showing my mortgage account and a credit card that is paid off in full each month (these are the only two items on my report). I earn £40k per annum and the repayments are £370 per month. I carried out the soft check in the M&S website and it came back successfully offering me an interest rate if 2.8%, however my full application had been rejected! Any idea why? Are soft checks a complete waste of time? Thanks for your help!

You made a mistake when entering details on your second, full, application?

They didn't like something they saw on one of the other CRA searches (there are 3 main CRAs and lenders may soft search only one)?

They didn't like something they saw on a Fraud Prevention Agency search (possibly not carried out on the eligibility check)?

They don't like the company you keep! In other words, maybe the eligibility search doesn't search any financial associates' credit files?

StopIt

A soft check only provides a limited picture to a lender, and is thus only a guide.


You should have been accepted, but something changed upon a full check.


You can always appeal the decision and you never know, it might be successful but you may not get the representative rate.


What CRA did you check? There are 3 and it'll pay to check all 3 as M&S may have used a different one.


They can all be accessed for free:


1: ClearScore, Covers Equifax
2: Noddle, Covers CallCredit
3: MSE Credit Club, Covers Experian.


Remember, after all that, it may just be that M&S have decided that they simply don't want to lend to you, for a myriad of commercial reasons that are not connected to your credit history. In such a case, try elsewhere.

WillyWonga

It is best to apply for a loan at the start of the month. Reason being is that banks have a set limit to lend each month. When the "pot" starts to reach its limits then the bank will tighten its own lending criteria. Vice versa if its a quiet month then they relax their criteria. So at the end of the month its possible to be difficult to get a loan. Factor in Xmas and people rushing to get some cheap credit before the interest rate rises then put it down to wrong time wrong place.

sccooter

any number of things can give you credit rating that is not as good as you think. for example you may have existing credit (cards) that you are not using. You may pay stiff on time but have too much exisitng borrowing- Or too little. Or never borrow which give you no credit record for them to observe. You have to hit a sweet spot that appeals to them. Or siple things like making sure you put a land line on application not just mobile helps. Try again with a joint application (wife) etc if possible. Just some suggestions

cj1974cr

It could be a simple as Credit Scoring;

Now to clear up a very big myth banks ; building societies and finances house don’t use the Experian; Equifax or CallCredit Score.

So when you tell them your score is 999 - this makes no difference.

They use there own internal scoring system that gives points assigned to answer to their question; they also asses affordability and own group data , so if you miss use existing accounts with them; this doesn’t help.

The chances are; the decline decision was system driven;

Most lenders look at the level of unsecured debt versus income ; does the leve of debt outstanding exceed your income?, have you taken a lot of new credit within a short period of time; and what does your spending on credit cars look like, are you taking cash advance on any credit cards: , or up to limit on your overdraft,

These could be signs of financial strsss; bear this in mind if you plan to appeal; the decline reason should indicate the reason for decline; they don’t have to tell you the reason for decline; just an indication; and Credit Scoring is a permitted reason to decline.