Declined by Tesco, going to the bank

dc1980

Hi all

My wife and I made a joint application for a 35k loan from Tesco for home improvements and were declined, despite both having excellent and good Experian scores.

We had both recently moved some CC debt onto new 0% interest cards so the fact that we opened these fairly recently may have been a factor. Experian also told me that having below 15k CC debt would look better, which I have, but it's not up to date on my report yet, annoyingly.

My question is should we wait 3 months before applying anywhere else or are there lenders who would potentially lend before that time period elapses since the Tesco decision?

We have building work ready to start and a reasonable pot to begin with but will need the loan to get over the finish line.

From an affordability P.O.V, I can show all income and outgoings leaves me with circa £900 head room even if I was paying a £700 repayment amount each month. That's purely on my budget without adding my wife's income. I have an appointment at my bank (Lloyds) next Friday to show them my figures.

[Deleted User]

Try somewhere now. If declined, leave it a few weeks before re-applying.

Have a look at your three credit files to see if there is anything else lurking there, or if it is just the level of debt you're carrying. Disregard the scores that any of the CRAs give you as they don't reflect lender criteria in any way.

spadoosh

If youve recently switched credit cards have you made sure you closed the old accounts?

You could be making the available credit to you look more than it actually is which will effect how much theyre willing to lend. Plus it can take a few months for the credit reference agencies to update account details and balances.

dc1980

Thank you. Tesco did say that the amount of available credit could be a factor. One card, which I've paid down to less than 2k and may well get rid of in a month, had a limit of £13k, and all told I alone had available a total of nearly 30k, so I've slashed the limit on that big one down! I do see how they can see that as an extra layer of risk.

dc1980

Thanks, will take a look at the other two - is it Equifax and Clearscore I should look at?

[Deleted User]

Clearscore and Noddle. But make sure you also checked the data on Experian.

It was probably a mistake to slash the limit on your card, but what's done is done. Leave your other limits alone, as 30k wasn't particularly high, if your incomes are reasonable.

dc1980

One other question. If I were to decide to apply elsewhere now, Experian's loan matcher threw up Rate Setter as 100% chance of approval. Does anyone have experience of this lender's application process?

dc1980

Yeah, I did it on the back of what Tesco told me when I rang them for further info as to why we were declined, but I suspect I would have been better off leaving it as was!

Sncjw

What are your incomes it maybe your current income to debt ratio causing problem

dc1980

What are your incomes it maybe your current income to debt ratio causing problem

1. 57,200 plus 10-15% annual bonus
2. 45,000

Ben8282

dc1980 wrote: »

We had both recently moved some CC debt onto new 0% interest cards so the fact that we opened these fairly recently may have been a factor. Experian also told me that having below 15k CC debt would look better, which I have, but it's not up to date on my report yet, annoyingly.

This could well be the cause of the problem. If your credit files are showing in excess of £15k credit card debt, even if at 0%,that doesn't really look good to the loan provider.
I agree that it was a mistake to reduce your credit card credit limit both in the sense of the higher credit limits you have the more trusted you appear and by reducing this credit limit you are increasing the utilisation % of your credit cards.