trouble getting a loan

idletim

My daughter started work as a doctor over the Summer. She has never been in debt but has been refused a loan twice (John Lewis and Admiral). She has a good credit score (or did have before she was refused 2 loans) and wants to borrow about 7 thousand. Anyone any ideas what to do next?

[Deleted User]

Her good credit score is unfortunately just a fictional number and not a factor in lending.

Lenders will assess her on her credit history and income. Have a look at her three credit reports to see what appears. She'll need good account history and few or no negatives.

Her recent new job may also be a factor for mainstream lenders.

Failing that, saving may be the best option.

Ben8282

First thing stop applying.
From the limited information given it is impossible for anybody to give an informed opinion as to why she is being refused.
Possible reasons could include any or all of the following -
Short time at current address/address instability
Short time in current employment/employment instability
Affordability after payment of rent and other credit commitments
Low income
Stated purpose of loan
Not on ER
Lack of a credit history
High balances on credit cards and/or existing loans
etc

JayRitchie

idletim wrote: »

My daughter started work as a doctor over the Summer. She has never been in debt but has been refused a loan twice (John Lewis and Admiral). She has a good credit score (or did have before she was refused 2 loans) and wants to borrow about 7 thousand. Anyone any ideas what to do next?

Why does she want to borrow the money?

Davy_Jones_II

If she’s at the start of her career then this is a very good stage at which to make a major life decision, is she going to be prudent, and save for things, or start sticking everything on credit?

Of course, if this is a one year loan for a car that she’ll use to make a hard commute far more pleasant, then that’s very different to borrowing to shuffle other debts around or to go on a holiday (hence the question above about the reason.)

If you give some more details people should be able to give more help.

idletim

JayRitchie wrote: »

Why does she want to borrow the money?

It's for a car.

idletim

Davy_Jones_II wrote: »

If she’s at the start of her career then this is a very good stage at which to make a major life decision, is she going to be prudent, and save for things, or start sticking everything on credit?

Of course, if this is a one year loan for a car that she’ll use to make a hard commute far more pleasant, then that’s very different to borrowing to shuffle other debts around or to go on a holiday (hence the question above about the reason.)

If you give some more details people should be able to give more help.

She has no debts and has never had a credit card. She's studied for six years and supplemented her student loan and money we gave her with a part time job. She has had an old car which her Grandma gave her to travel to neighbouring towns for placements. Now that car is falling to bits and is costing a lot of money. I don't think she'll be sticking everything on credit from now on but rather using a loan to sort out a car quickly.

Gaz83

If she's never even had a credit card then that's the most likely reason - she has no credit history, no track record of borrowing and paying back money. No-one's gonna take a risk lending £7,000 to an unknown quantity.

JayRitchie

idletim wrote: »

It's for a car.

Its worth asking for specific advice on borrowing for cars and your daughter looking at loans specifically aimed at young doctors (who are super safe to lend to so get way better deals than other graduates). If she gets an asset backed loan she may get a better deal.

username901

idletim wrote: »

She has no debts and has never had a credit card. She's studied for six years and supplemented her student loan and money we gave her with a part time job. She has had an old car which her Grandma gave her to travel to neighbouring towns for placements. Now that car is falling to bits and is costing a lot of money. I don't think she'll be sticking everything on credit from now on but rather using a loan to sort out a car quickly.

Is the old car going to cost her more than £7000 to keep it working? I doubt it.

JayRitchie

username901 wrote: »

Is the old car going to cost her more than £7000 to keep it working? I doubt it.

I'm very anti debt but even I would would not advise a young doctor to not borrow money to get a decent reliable car. Assuming she is entering FYI there is a stressful enough life without worrying about a car breaking down when she is likely to move hospitals (without necessarily having much choice about where to go) and working irregular shifts. FWIW I would spend more that £7k on a car in that circumstance.