can't understand why we're refused credit

WebbMac

Hi My bf & I have been browsing Martin's site for a few months, but today I have registered and this is my first post.

We are approx £30k in debt between us, loans & credit cards.
Although we have lived together for 1.5yrs, we do not have a mortgage, we are trying to shift this debt first.
I am on a DMP, and have been for a couple of years. My bf has 2 large personal loans and a credit card, all with his bank, and all of his payments have always been up to date. We do not have any credit in joint names.

We are both self-employed, my bf being the main bread-winner. And I have a Son.

We need a loan. To consolidate some of our smaller bills and debts. We've worked out a loan of £6.5k would free up approx £200 - £300 per month and make day-to-day living much easier, so that we can focus on the bigger problem.

We got copy of my bf's credit file, and there was nothing untoward on it. I accept that self-employment may be an issue. We have tried balance transfers on his credit card with 2 or 3 major lenders and were refused. And now Eskimo Loans have refused us a loan (in his name, we didn't include myself as my credit file is quite poor) I cannot understand why we keep getting refused!

Can anyone out there help? I don't know what to do next! Any advice at all is apreciated.

Beki x

CLAPTON

how much does he earn
does he have three years worth of account
how much does he owe already.

jonesMUFCforever

You are on a DMP - that 's a very good reason why you should not get more credit until that has finished. (Just think why you have a DMP in first place!)
Your bf has 2 large loans and credit card and is self -employed, perhaps lenders think you are over committed!

So that's 2 reasons I can come up with why you are /will find it difficult to get additional credit.

If the total of your bf's loans and credit cards is £25k or under then his bank might look at consolidation.

WebbMac

Hi, and thanks for the replies folks, I apreciate your input.

CLAPTON, bf earns average £10k per annum, and yes, he has more than three years of professional accounts.

His debt is approx £14,500 and costs about £350 per month.

ejones999, overcommittment is something I had considered also. I can't see his bank helping to consolidate as his debt is with them, and if he consolidated they would loose interest, or am I being cynical??

Although we haven't applied for anything jointly, would my background be causing him problems?

If I can't work it out we're thinking of going to Welcome Finance, or someone similar, just to get us out of this hole.

Beki x

jonesMUFCforever

WebbMac wrote: »

Hi, and thanks for the replies folks, I apreciate your input.

CLAPTON, bf earns average £10k per annum, and yes, he has more than three years of professional accounts.

His debt is approx £14,500 and costs about £350 per month.

ejones999, overcommittment is something I had considered also. I can't see his bank helping to consolidate as his debt is with them, and if he consolidated they would loose interest, or am I being cynical??

Although we haven't applied for anything jointly, would my background be causing him problems?

If I can't work it out we're thinking of going to Welcome Finance, or someone similar, just to get us out of this hole.

Beki x

They would fall over backwards to help if his credit history is ok.
It's called loan crunching - not totally ethical - but as long as you/bf know that there will be an early settlement charge on both loans and they will probably take his card away from him then I would suggest that he contacts the bank.
Banking today is all about selling ''today'' never mind what you did last month year or whatever.

I would rather slit my wrists than go with Welcome finance!

WebbMac

ejones999, thankyou for teaching me something I never knew! I think an apointment with his bank is in order!

albertross, thanks for your reply, what is DFW board??

Beki x

missk_ensington

Hi, even though you weren't mentioned on the lloan application it is possible he has been linked to you by association as being at the same address. The information these credit companies hold on us is very advanced. All it takes is for you both to be listed on the council tax at the same property to be financially associated. This is a big problem when people have lodgers or in house shares because another persons poor credit will cast a dark shadow over the address for everyone.

Also, the fact that he has a lot of debt already and no asset (house) to secure it on, he is deemed too high a risk. Especially in the current debate of sub-prime lending.

If you were homeowners it would probably be different but look it from their point or view, you're on a DMP (presuming they know about that), you're accumulatively in £30k of debt, poor credit history for you, self-employed and no assets and over a third of his income already repaying a £14,500 loan. Therefore, in this light it isn;t really surprising they're not prepared to take on the risk. Lenders only help themselves, no the customer!! :-)

seven-day-weekend

I too recommend the DebtFreeWannabee board where you can learn about snowballing instead of consolidating to get your debts down quicker without taking on more debt.

Post your statement of affairs (there's a Sticky thread by MSEAndrea near the top of the board - look for the bit by Southernscouser) and they will help you to cut back and reduce your debt quicker.

Go for it - it's an eye-opener!

WebbMac

Blimey, thanks for all the replies, I should have registered sooner!

albertross, thanks for your suggestion. Yes, we are aware that being an employee has it's advantages, but bf has many reasons to avoid going down that road. Thankyou for your instructions re DFW board, I'll definately do that next.

miss_ensington, bf isn't on any household bills at this address, including council tax, although we are legitimate, and he is on the electoral roll. I've never been sure whether there would be association or not. But I guess you've cleared that up for me (bf won't be happy!).
Yes, if we were homeowners it would be a completely different ball-game! It's frustrating because we want to clear our debt so we can afford a mortgage, but if we had a mortgage it could be easier to consolidate our dedts! It's a vicious circle
Although I had considered everything individually, the way you've put our situation down in balck & white helps me to see how we would be viewed by creditors, and you're right, it don't look good

We just need a short term fix so we can afford to live! I know Welcome Finance are scraping the barrel a bit, but whay are they so bad???

seven-day-weekend, thanks to you too, I'll get onto DFW like you and albertross suggested. I hope someone can help, because it's getting that way there won't be a Christmas in this house.

Thanks for all the advice folks, have a good day.

Beki x

missk_ensington

Don't worry it'll get sorted sooner or later. The electoral roll will very much tie you together by association, more than anything else probably.

Are you guys able to bring in more money anyhow? Try the DFW board, people have ingenius ways of cutting household living x

regularsaver1

I think this could be an affordability problem and this may be why its declined