M&S higher APR than quoted

Danipat

I applied for a loan with M&S as it was advertised as 2.9% APR. Spoke to the underwriters yesterday who told me the APR may change due to individual credit score.

Now my credit score is perfect, I checked it recently and it was the best it could possibly be, I dont have much credit and I've never missed a payment in my life but apparently after looking at my credit score the APR is now 5.9%!!

I cant believe it such a difference and feel like the 2.9% advertised rate is a ploy just to get people in. I have an excellent score and my APR had doubled!

Has anyone else experienced the same?

Clive_Woody

How is a Representative APR representative?

The interest rates offered to accepted applicants can vary, based their credit score and income, through risk-based pricing. This can be advantageous to customers, since it enables some to access credit they otherwise would be declined for. However, without restraint, nothing would prevent lenders aggressively promoting low-interest rates, which they ultimately offer to very few customers.

The law, therefore, requires that the advertised APR is 'representative' of the credit agreements the lender intends to strike with applicants. To be representative, the APR must therefore, be the rate offered to at least 51% of applicants.

Clive_Woody

Someone will be along in a moment to tell you that your credit score is a made up number that only you can see.

[Deleted User]

It sounds as if you have a thin file, which makes you higher risk.

That would explain why M&S have given you a low credit score and the higher rate.

MallyGirl

To be fair 5.9% for a loan is still a pretty decent rate

-taff

Clive_Woody wrote: »

your credit score is a made up number that only you can see.

done........

Danipat

Deleted_User wrote: »

It sounds as if you have a thin file, which makes you higher risk.

That would explain why M&S have given you a low credit score and the higher rate.

I have 2 credit cards and car finance. Ive had credit cards for about 10 years and car finance for 7 years. Never missed a payment on any other these the whole time. Got accepted for a mortgage recently too. Ive always had contract phones so that's a form of credit too. So I wouldn't say it's that 'thin' personally.

[Deleted User]

The recent mortgage application may have been a factor.

Lenders like to see you settle down a bit first.

Danipat

We didn't actually go through with the mortgage. That was a few months ago now.

foxy-stoat

Danipat wrote: »

I applied for a loan with M&S as it was advertised as 2.9% APR. Spoke to the underwriters yesterday who told me the APR may change due to individual credit score.

Now my credit score is perfect, I checked it recently and it was the best it could possibly be, I dont have much credit and I've never missed a payment in my life but apparently after looking at my credit score the APR is now 5.9%!!

I cant believe it such a difference and feel like the 2.9% advertised rate is a ploy just to get people in. I have an excellent score and my APR had doubled!

Has anyone else experienced the same?

Lots of people have experience this - oh and you dont have a credit score, the person you spoke to should of said credit history.

5.9% isnt a bad rate....the rate hasn't doubled as the rate wasn't offered to you in the first place.

BoGoF

Your posts are full of contradictions;

"I don't have much credit" turns out to be "2 credit cards and car finance". What are the balances and monthly payments?

"Got accepted for a mortgage" becomes "we didnt go throught with the mortgage". Was it a decision in principal or a fully approved mortgage?

Your 'perfect score' means nothing to a lender?