Loan application rejected - why?

redbobble

Thanks again for your help. It's purely the fact the place is inhabitable that causes the panic! I was advised to take the loan out before we moved, but didn't want to risk it on the mortgage application.

I have copied the transunion redacted report below if anyone can assist.

I am going to try friends and family to see if they can loan me the money, just a bit embarrassing as I think they won't believe we were rejected and its not something we've had to do before. I just feel that once the address gets updated, we will be okay (please correct me if i'm wrong) but the number of applications might spook the lenders so we are now in a catch 22, i don't want to wait 3 months just to be rejected again!

Bit of general advise, I have some dormant bank accounts and credit cards below, all with zero balance and they haven't been touched for years. Is it wise to shut these down, as they are access to credit? Or would shutting 2 bank accounts and 2 credit cards be a warning sign to a lender as well!

All advise appreciated.

Your personal details

This is the information used to generate your TransUnion credit report.

 

Report created on 13 May 2020

 

Redacted name and address - all accurate and correct.

Your reported accounts

These are the open accounts on your current TransUnion credit report.

 

BANK ACCOUNTS

Redacted £0

Currently open

 

Redacted (bank we applied with) £0

Currently open

 

Redacted £0

Currently open

 

Redacted £0

Currently open

 

CREDIT CARDS

Redacted £2,430

Currently open

 

Redacted £0

Currently open

 

Redacted £0

Currently open

 

Redacted £0

Currently open

 

MORTGAGES

Redacted £199,351

Currently open

 

Redacted £176,840

Currently open

 

Note from redbobble: This is the joint mortgage

 

MOTOR FINANCE

Car finance £12,105

Currently open

 

UTILITIES

Mobile phone £0

Currently open

 

Search history

HARD SEARCHES

No hard searches

 

SOFT SEARCHES

Credit Karma UK 13 May 2020

Identity Check

 

Callcredit Consumer 05 May 2020

Consumer Credit File Request

 

Addresses

Redacted - all addresses correct and accurate.

Financial connections

Redacted - all addresses correct and accurate.

 

Other names

No other reported names

 

Electoral roll

There is currently no electoral roll information from your local council on your credit report.

 

Public information

Details of any bankruptcies, insolvencies or court judgments provided by TransUnion.

 

BANKRUPTCIES

No bankruptcies or insolvencies

 

JUDGMENTS

No court judgments

 

Notices of Correction

No notices of corrections reported

Cifas

There are no Cifas warnings reported at your current address(es).

IrishSean

What about e-mailing or phoning your dormant bank account and CC providers? I'm guessing you have a lengthy relationship with them and you've stated your credit history is good with no missed payments. If you got a zero % spend or an overdraft with them would that help? (At least a few months OD at 0% to give more options)
You could cite the need for help given coronavirus situation and maybe explain you've family and need to make your new home inhabitable; you might even find a lender who's not a monster (😂), can look at your individual circumstances and help out.

Just a thought. That aside, borrowing from friends family is an option, as long as they're OK with terms. As always, our incomes can go up and down, esp with these uncertain times. As long as you tjey are OK with the affordability it could be a fall-back at least.

mcpitman

Earnings or affordability could also be a reason for a decline.
What is your ball-park income, and what is your combined ball park income?
Were you applying for the loan in your sole name?
Is the loan to be secured or unsecured?

Do you have 2x mortgages?
Does your CC have a balance of £2,430 or is that the credit limit?
What are the limits on other cards?

IrishSean

mcpitman said:

Earnings or affordability could also be a reason for a decline.
What is your ball-park income, and what is your combined ball park income?
Were you applying for the loan in your sole name?
Is the loan to be secured or unsecured?

Do you have 2x mortgages?
Does your CC have a balance of £2,430 or is that the credit limit?
What are the limits on other cards?

Your our household income is 100k and total existing borrowing is closing in on 450k. Might make lenders nervous in these times; I don't know, not an expert on LTV or Loan to Income Ratios. Anecdotal info from others on what's being lent / not being lent by banks might be a guide.
You can see with the R word (recession) being confirmed today lenders are nervous about all of our abilities to pay should incomes fall off a cliff😱

redbobble

mcpitman said:

Earnings or affordability could also be a reason for a decline.
What is your ball-park income, and what is your combined ball park income?
Were you applying for the loan in your sole name?
Is the loan to be secured or unsecured?

Do you have 2x mortgages?
Does your CC have a balance of £2,430 or is that the credit limit?
What are the limits on other cards?

Hi,
My income is just over 66k, joint income, just over 100k. 
We applied in my name, my wifes name and as a joint application.
The loans were unsecured. I would have liked to applied for a secured loan but couldn't find one available, very few home improvement loans on the market.
The 2 mortgages are because we have just moved, so have one mortgage that we ported and one that we used to "top up" the remaining balance required.
Credit card actually has a balance of 4.5k with a 6k limit.

redbobble

UPDATE
Family have agreed to lend us 10k. This should tide us over for 4-6 weeks to continue getting trades in and (hopefully) allow the credit reports to show us on the electoral register (went on 1st of May, fingers crossed it comes through in June).
In the short term is there anything else we can do to improve our chances? Should I shut the dormant credit cards and bank accounts? I don't want to go ahead and start shutting credit cards/bank accounts if it would end up having a detrimental effect.
We hope it should help that we now only need to apply for a 10k loan.
Comments/tips appreciated as always.

sourcrates

If you have 100k income, why not just do the work as the funds allow, 100k is a massive salary, i fail to understand your need to borrow on such a large income.

mcpitman

redbobble said:

UPDATE
Family have agreed to lend us 10k. This should tide us over for 4-6 weeks to continue getting trades in and (hopefully) allow the credit reports to show us on the electoral register (went on 1st of May, fingers crossed it comes through in June).
In the short term is there anything else we can do to improve our chances? Should I shut the dormant credit cards and bank accounts? I don't want to go ahead and start shutting credit cards/bank accounts if it would end up having a detrimental effect.
We hope it should help that we now only need to apply for a 10k loan.
Comments/tips appreciated as always.

Thanks for coming back on.

Careful, money and family don't tend to mix, but that's your choice.

Onto the rub - with 100k joint income and £375k mortgage just taken out ontop of a £12k car loan and 5k card is likely to make the lenders twitchy when you ask for a further £20k.

Now you are on the electoral roll, if that pulls through next month, might be worth putting one more application in. Otherwise i'd leave it for a few months.

Do you have 3x Credit cards with nothing on? What are the limits on those cards? Is there an option for Money transfers 0% on those?

Honestly - if you want to save some £'s long term a review of your SOA (in-comings and outgoings) may help at some point in the future.

redbobble

Thanks for the swift response. 
I have 3 credit cards with nothing on. Also there are 2 dormant bank accounts I forgot about. Is it worth shutting some/all of these down this month to help with the application in June?
My partner, although on a lower income has no credit cards in her name and no car loans, would it be better she applied on her own, particularly as its a lower amount? Or would it be better to do a joint application? It looks like there isn't many options with lenders out there at the minute!
We have reviewed our incomings and outgoings, we are in pretty good order, particularly with the current climate we aren't spending much at all. We had (wrongly it appears!) assumed the loan wouldn't be an issue, so put our savings towards deposit/solicitor etc so we could stretch to a bigger house. With our bigger salary we are comfortable we can repay the amount, it's just convincing the banks!

mcpitman

redbobble said:

Thanks for the swift response. 
I have 3 credit cards with nothing on. Also there are 2 dormant bank accounts I forgot about. Is it worth shutting some/all of these down this month to help with the application in June?
Depends on the limits and age of the accounts, I don't think 4 cards is excessive on your salaries. The more important point is what are the limits and are there any Money transfer offers on 0% available on them?
My partner, although on a lower income has no credit cards in her name and no car loans, would it be better she applied on her own, particularly as its a lower amount?
What does your partners credit file look like? Do you mean apply for a £20k loan on c£35k income? I wouldn't.
Or would it be better to do a joint application? It looks like there isn't many options with lenders out there at the minute!
I would go with a single application in my name if I were the higher earner. Honestly not sure how the whole "joint loan" application process works.
We have reviewed our incomings and outgoings, we are in pretty good order, particularly with the current climate we aren't spending much at all.
Great news, what are you left over with every month "spare" after any and all commitments?
We had (wrongly it appears!) assumed the loan wouldn't be an issue, so put our savings towards deposit/solicitor etc so we could stretch to a bigger house. With our bigger salary we are comfortable we can repay the amount, it's just convincing the banks!
What period are you looking at borrowing the money over if you were to be successful and what would the estimated repayment be?

I still think the main problem will be "credit exposure" (new borrowing in short amount of time, increasing outgoings) and possibly the Electoral roll issue.

There could be affordability issues too, for example of your "spare cash" is £1k per month, and you are still carrying balances on CC's and have car repayments, then in theory the £1k isn't enough to live on (as you are still borrowing, not saving). Therefore with an additional loan payment, this could make things harder or push you further into debt if any "money emergencies" cropped up.