Personal Loan rejection due to the word. ”Wonga”

Bladerunner64

My daughter is applying for a personal loan to buy a new car. The loan application is with Barclays.  It ran into a few issues and after several calls it transpired the rejection reason from the underwriters is” high interest loan”. My daughter asked for more detail and the advisor informed her she had taken out a pay day loan on 6th August 2019. My daughter informed the advisor she was not even in the country and that she has never had a pay day loan of any description. She gave permission for the advisor to look back at her transactions for the last twelve months. The advisor informed her she had a transaction on the date in question “Holiday Wonga”.  My daughter replied “yes, my Dad had transferred my holiday spending money using the Barclays pingit. He labelled the transaction reference Holiday Wonga.” This the advisor confirmed. The advisor who is now referring it back to the underwriter. Our only conclusion is that a word search of some description is used in the application process.

How do we go about rectifying this with the credit score agencies?   

bradders1983

Rectify what? The transaction references for bank transfers are certainly not reported to credit reference agencies, the loan wasnt declined because of credit score or record but because someone at the bank where she has applied for the loan has looked through her bank statement (which she must have given permission to do) and have come to the wrong end of the stick about a private money transfer between family members. Just tell her to get them to look at it again.

Duke203

Check that no one sent any money at other times with a description of "from your amigo" or any other funny text like that. Similarly bad for your 'score'.

bradders1983

Duke203 said:

Check that no one sent any money at other times with a description of "from your amigo" or any other funny text like that. Similarly bad for your 'score'.

No, it would be totally irrelevant for your "score"

Do people seriously think that the wording of payment references between friends and families bank accounts has any bearing at all on a credit file? This truly is the end of days.

The only bearing it has is if a human looks at a bank statement and doesnt get the "joke". I can only assume the loan was applied for at the same bank she holds the current account and they have access to look at her bank account to make a decision.

nyermen

Blimey, never seen a credit model that reviewed actual payee names / references in that way.  It was common to aggregate by "spending type" to see how much is spent on essentials vs luxuries etc.  The underwriter is a bit silly, not only did they not check the sending account but just looking at the credit history would show no such loan.
Suspect they are doing the same thing with common gambling names as well. 

Bladerunner64

Thanks for so many responses so quickly. For added clarity the bank the loan is being applied for is the one that holds my daughters current account.
My concern is that in the world of automation it would make sense to run a key word search  on every loan application as well as looking at spending patterns . That way you can reduce the amount of requests that require human reduce interaction by rejecting base on certain trigger words. Key words like "wonga", " payday loan" and could also include ,as Duke203 suggested, well known on-line gambling sites.   

@ Bradders1983 . The bank are looking at it again now that the transaction has been confirmed as not high interest rate . I also thought it should be irrelevant to your score , but what if the agencies use a similar algorithm. Its not my field of expertise . 
 
@ Duke203 . So far I am the only one guilty of using humour on her transaction references. I hope no-one reviews some of the tongue in cheek entries I have made transferring funds to my wife. Lesson learnt!   

@nyermen I agree with you it does look like half a job was done. 

When I talk about rectify , is there a method to check with the credit scoring agencies to check if this simple transaction reference could have a detrimental effect to a credit score ?  

bradders1983

Agencies wont use an algorithm that looks at the wording of payment references, because banks dont report that wording to them. Its as simple as that. There is nothing to "rectify".

100% of the fault here is on the eager underwriter who saw the word "Wonga" on a bank statement, put two and two together and came up with five.   And in this world of automation it would have picked up a legitimate payday loan during an automated credit check, if there was one. Which there isnt.

If they are looking at it again, then that is fine.

Bladerunner64

@Bradders1983 -  Thanks for the reassurance. I work in a world where there always someone trying to remove humans from equation.   

Jojomissy

I do have to keep telling my son to stop labelling transfers to me as "drug money" and other dodgy labels as we are remortgaging shortly. He thinks he is hilarious 🙄

[Deleted User]

To clarify no one has a credit "score" its a made up number by the CRA's that only you ever see, what we all have is a credit history, and a loan from Wonga would put all main stream lenders off.

Brock_and_Roll

Makes me pause for thought about some of the "amusing" payment references I put on payments to friends and relatives!!!