Why did I get rejected for a loan?

floratheexplorer

Please excuse my stupidity – I’m awful when it comes to money and finance as my present situation will attest to.

I have about 7000 on credit cards – as they are spread throughout diff cards (they are all being paid off) but I thought I’d get a loan to put it into one manageable payment.
I have an excellent credit rating as, despite the fact I’m rubbish with money, I’ve always paid on time.

My Experian account recommended a loan I would be 90 percent likely to get so I went for it but I got rejected.
I’ve tried to find out why but haven’t been able to.
I found it easy to get a loan for my car from the bank 5 years ago and it is about to be paid off.

Would anyone be able to give me an idea as to why?
Thank you in advance and I’m so sorry if this is a stupid question.

BoGoF

Firstly you don't have an excellent credit rating despite what your credit report may say.

Too much existing debt perhaps?

You are on electoral roll?

Income level?

Sncjw

What’s your income.

Also do you realise they will be assessing you on having 14k of debt

floratheexplorer

Thanks for this - are credit ratings useless?
I earn £40k and live in Belfast. On electoral roll.
It must be the existing debt of £7,000 then - which is why I'm getting the loan.
I'll just keep paying the credit cards off.

DCFC79

floratheexplorer wrote: »

Please excuse my stupidity – I’m awful when it comes to money and finance as my present situation will attest to.

I have about 7000 on credit cards – as they are spread throughout diff cards (they are all being paid off) but I thought I’d get a loan to put it into one manageable payment.
I have an excellent credit rating as, despite the fact I’m rubbish with money, I’ve always paid on time.

My Experian account recommended a loan I would be 90 percent likely to get so I went for it but I got rejected.
I’ve tried to find out why but haven’t been able to.
I found it easy to get a loan for my car from the bank 5 years ago and it is about to be paid off.

Would anyone be able to give me an idea as to why?
Thank you in advance and I’m so sorry if this is a stupid question.

No 1 on here will know the definite answer, can give suggestions, the lender wont know why either.


Whats the reason for the cards ?
You don't have to say but is it something that's likely to crop up again ?

So you have £7k of debt and you applied for £7k yes ?
The lender will have no idea you would be using the loan to pay off the cards eg consolidate, they will see it as extra debt eg £14k your taking on.

Back to my earlier question re is it something likely to crop up again, pointless consolidating if the spend on the cards happens again.

floratheexplorer

Ok - that makes sense. Am I best to close the credit cards the minute they are paid off?

Sncjw wrote: »

What’s your income.

Also do you realise they will be assessing you on having 14k of debt

[Deleted User]

Only if you don't trust yourself with them.

Otherwise, you should be using them wisely to build a good credit history - ie use them and clear in full each month.

floratheexplorer

Thanks for this - the cards are just leftover from stupid uni years of travelling and acting like an idiot that I have continually moved to new ones and only recently taken my head out of the sand and started to properly pay off. I've no intention of spending on them.

I will just continue to plug away at all the credit cards and close them when I'm done.

Thanks for the suggestions as to what it might be.

DCFC79 wrote: »

No 1 on here will know the definite answer, can give suggestions, the lender wont know why either.



Whats the reason for the cards ?
You don't have to say but is it something that's likely to crop up again ?


So you have £7k of debt and you applied for £7k yes ?
The lender will have no idea you would be using the loan to pay off the cards eg consolidate, they will see it as extra debt eg £14k your taking on.



Back to my earlier question re is it something likely to crop up again, pointless consolidating if the spend on the cards happens again.

BoGoF

How much left on the car loan?

To be honest £14k of credit on a £40k salary shouldn't ring alarm bells with a lender which suugests there may be something on your credit file they dont like.

Can you list your credit cards with current balance and credit limits. Have you checked all 3 credit reports to see if anything amiss?

floratheexplorer

Hi - really appreciate your help.

Halifax limit - about £9000 and balance is 4,000
MBNA - limit is about 4,000 and i have 1000
Marks and Spencer - limit is 5000 and I have 2,000

There is 300 left on the car loan and it is due to be paid in full in October.

I have checked Equifax and Experian and both were very good scores (or so they said).
I paid for the Experian account was not in bad standing with any company.
I was just a bit confused as I was deemed 90% likely to be accepted by experian but maybe that is not good to go on.

BoGoF wrote: »

How much left on the car loan?

To be honest £14k of credit on a £40k salary shouldn't ring alarm bells with a lender which suugests there may be something on your credit file they dont like.

Can you list your credit cards with current balance and credit limits. Have you checked all 3 credit reports to see if anything amiss?

[Deleted User]

floratheexplorer wrote: »

I have checked Equifax and Experian and both were very good scores (or so they said).

They say my stepfather has a good score and he's been dead for two years.

Make sure you look at the actual data on each, going back the full 6 years.