Experian Score 999 out of 999 - Still refused a loan

[Deleted User]

Stop reducing the OD. You're now givng lenders the impression that your bank doesn't trust you and is withdrawing your credit facilities!

Leave it but don't use it. Ask if they will return it to its previous level.

YorkshireBoy

You still haven't said how much you've asked to borrow.

Who do you bank with?

Which other banks also "indicated" you would be declined?

Does the graduate bank account appear on your credit reports? And the overdraft facility too? And the credit card?

Have you a continuous ER history going back 6 years? Or are there gaps?

Is the ER address the same as the address your bank and credit card provider have?

caramiacecilia

@sleepyjones - well I wondered this myself to be perfectly honest and was the reason I booked the appointment with the bank in the first place. I was advised that it does not matter on the status of the account so I would not automatically be refused as it is a graduate account. I think the upgraded bank account with Lloyds gives you memberships to certain clubs, insurance (legal, mobile phone and travel) as part of the package which is what I would be paying for. But maybe my next step is to upgrade the account and see if that makes a difference.


@zx81 - I was advised to slowly reduce the overdraft by the bank manager as it is apparently viewed negatively as a short-term borrowing option and I have had it for 5 years (3 years undergrad degree and 2 years Masters) so I am a little confused.


@YorkshireBoy - I dont have a particular figure in mind, its normally about £7,500 that gets the best interest rate but I was looking more around £5,000. I bank with Lloyds Bank and have done all of my life. I have had meetings with Nationwide and Halifax who both said that the reason is the same, Credit Bureau Data. But surely all of the banks use the same Credit Reference Agencies so the result will be the same? The Graduate account appears on my credit report - but not as 'Graduate', it looks like a normal account. Everything I have is showing up on my report. Including the joint bank account with my ex - but that is showing as settled. I moved out for 6 months, but I did register at the other address so there should be a full ER history. Yes the addresses listed with my bank and on the ER are the same.

System

caramiacecilia wrote: »

I've been permanently employed for over a year now and earn a decent wage where I live (£20k).

That is likely the issue. Your current recent issues with being in overdraft combined with your level of income probably means you're failing affordability tests. The banks have a list of what they consider average expenses people have and throw in what you pay for rent/mortgage and assume what the free amount of money you'll have a month is. For the money savvy this is unfair as it'll include amounts for stuff they don't actually buy and for stuff they do, higher than they spend.

What is your annual mileage? If it is low, say no more than 9,000 miles a year, the madness is that you'd probably stand a higher chance of getting a new car on PCP as the finance is secured on the car, unlike the bank loans which aren't secured on anything. There are certainly low/no deposit deals on PCP that have monthly repayments similar to a £5000 loan over 3 years. Downside is at the end of the PCP deal you'd have to find money to pay the balloon payment or buy another car and if you can't,go into another PCP deal. However I would imagine that three or four years down the line your income and finances will be in a much better state due to career progression.

[Deleted User]

caramiacecilia wrote: »

@zx81 - I was advised to slowly reduce the overdraft by the bank manager as it is apparently viewed negatively as a short-term borrowing option and I have had it for 5 years (3 years undergrad degree and 2 years Masters) so I am a little confused.

The bank manager has given you very poor advice, but he probably has limited knowledge of financial assessment.

Keep what's left of your OD and see if you can get it raised. Also get those additional credit cards.

bazzyb

If what you have posted is accurate then you are likely being declined a personal loan due to having a ‘thin’ file so the lender can’t predict how you will pay this back - and so a personal loan could be risky.

You may well be accepted for a personal loan elsewhere, and I would also say from the above that you would likely have no issues getting car finance eg hire purchase where the finance is secured on the vehicle. Only do this if you need the finance and don’t accept the first silly rate you’re offered especially if applying through a dealer.

For both the personal loan and the car finance you can do an eligibility check online which will not impact your credit file, this can give you an indication of what you can borrow and with whom.

Ben8282

caramiacecilia wrote: »

zx81 - I apologise, its probably the way I am explaining it... I have the facility of £200 in overdraft. So if I needed to, I could essentially use £200 that I dont have. But my account is always in positive - I do not use the overdraft. What I meant by paying it off is that since I have left university I have reduced the facility from £1500 to £200.

This is very strange terminology you are using. How can you think that reducing the overdraft limit on an unused overdraft facility represents 'paying it off.'

caramiacecilia wrote: »

@zx81 - I was advised to slowly reduce the overdraft by the bank manager as it is apparently viewed negatively as a short-term borrowing option and I have had it for 5 years (3 years undergrad degree and 2 years Masters) so I am a little confused.

I believe you have misunderstood this advice. Reducing the overdraft means reducing the amount by which your account is overdrawn, which would be good advice. It does not mean reducing the amount of the overdraft limit, which would be bad advice. I do find it difficult to understand though why you should have been given such advice in respect of an overdraft facility that you were not using.

caramiacecilia wrote: »

I have a small overdraft of £200 (to be paid off in summer)

If by this you mean that you are planning to reduce the overdraft facility to nil in the Summer and if as you say this facility is not used and the account is always in credit, then why are you waiting until the Summer to do this. I don't believe you should do this but as it appears that you do, I am wondering why you are waiting.


As to why you may have been refused the loan, your credit card credit limit is very low and your overdraft facility is very low, Is your salary being paid into this account? Perhaps the bank believe that you would be unable to afford the repayments. They will be able to see how much is coming in and going out from your account each month and probably have a good idea of where it is going.