Can I reject a loan offer if I want to apply for a different one? And will this affect my rating?

Paws1_2

Hello

I have decided to upgrade my (owned outright) car. I have only had it for 3 years and would normally keep it for longer but there have been some known issues with the model that have made me decide to move.

I would be really grateful if you could give me some advice about applications regarding my credit score:

I have had an excellent Experian credit rating 999 for several years but I have recently taken out a 12 month 0 % interest loan for a new camera (May) and have also transferred a 2,000 pound 0% interest credit card to a new one. I pay off £150 per month so it will be cleared by the end of the 0% interest but I have just noticed that new NatWest credit card have given me a 12,000 limit ! Clearly I am not going to use it but I wonder if this has caused my score to go down.

The new Experian score up to yesterday was 996. 

I do have a good level of savings (14,000) but they were being kept for our family holidays next year (would never normally have two but one got postponed by the company because of coronavirus) and to add some to our mortgage.

Because of this I decided to finance the other part of my car using a loan. I do not like the idea of PCP and always like to own my car outright. Normally keep it for 6 years +.  I checked on Martin Money savers to show I had a 99% chance of being accepted for a Postoffice Loan at 2.8% so I (now stupidly) decided to apply. I did get accepted but they offered me a 8% rate which of course I would never accept. Since applying my credit sore has gone down to 988.

I have always been offered the lowest rate so I am really upset and baffled. I have a permanent job on a good salary (£50,000). Talking to the car dealers they are offering much higher discounts if I use their HP loans of 3%.

My questions is - if I I don't take up the Post Office Loan, will this now affect my Experian credit rating and stop me getting approved for the dealer credit. I have never been rejected in my life but this has made me really worried now. How will the loan company know that I won't take up both offers. Do loan offers expire or can I reject it so It is clear that I am not trying to take out two loans for a car.

Thank you for any advice or help.

ThursdayNext 

[Deleted User]

You can reject the loan and apply elsewhere.  Any change in your score is irrelevant and can be ignored.

The search will appear on your files - too many may start to concern lenders and they will view you as higher risk.

Paws1_2

Thank you ZX81 for your reply :-).
How do I go about rejecting the offer so it doesn't show that I have potential credit?
Would I also be better to reduce the crazy limit that NatWest have put on my credit card which of course I will never use or will it make no difference.

Thank you :-) 

DCFC79

Paws1_2 said:

Thank you ZX81 for your reply :-).
How do I go about rejecting the offer so it doesn't show that I have potential credit?
Would I also be better to reduce the crazy limit that NatWest have put on my credit card which of course I will never use or will it make no difference.

Thank you :-) 

Just phone them and reject it.

Do remember your score has no bearing on loans since only you can see it. A 999 score isn't dead set to get you the best rates.

Reducing the NW VC rate may go some way to help the situation.

[Deleted User]

You simply don't take the loan.

Your card limit isn't crazy. It's a moderate limit that shows another lender trusts you.  That's the sort of thing that lenders look at in deciding whether to offer credit not the pretend scores which are purely for your own personal entertainment.

[Deleted User]

You simply don't take the loan.

Your card limit isn't crazy. It's a moderate limit that shows another lender trusts you.  That's the sort of thing that lenders look at in deciding whether to offer credit, not the pretend scores which are purely for your own personal entertainment.

DrEskimo

How much is your mortgage? It makes little sense to overpay on your mortgage just to borrow money at a higher rate.

Paws1_2

Thank you so much ZX81 - that is reassuring. Thank you :-) 
Dr Eskimo - We have £69,000 left on our mortgage with another 6 years left to pay. We are on fixed rate for next year and half (we have tried to overpay 10% each year as we were left some money although we don't have much left now) at 1.99%.

Paws1_2

DCFC79 said:

Paws1_2 said:

Thank you ZX81 for your reply :-).
How do I go about rejecting the offer so it doesn't show that I have potential credit?
Would I also be better to reduce the crazy limit that NatWest have put on my credit card which of course I will never use or will it make no difference.

Thank you :-) 

Just phone them and reject it.

Do remember your score has no bearing on loans since only you can see it. A 999 score isn't dead set to get you the best rates.

Reducing the NW VC rate may go some way to help the situation.

Thank you DCFC79 - that is helpful. I thought other lenders could see the "credit" you have but I guess they only can if you have actually taken it out.

DrEskimo

Paws1_2 said:

Thank you so much ZX81 - that is reassuring. Thank you :-) 
Dr Eskimo - We have £69,000 left on our mortgage with another 6 years left to pay. We are on fixed rate for next year and half (we have tried to overpay 10% each year as we were left some money although we don't have much left now) at 1.99%.

You won't get a personal loan at 1.99% so rather than use some of the £14k to overpay the mortgage you should use it towards the car.

Paws1_2

Thanks Dr Eskimo - that is good advice and I am now going to use the £14,000 for the car. I just felt a bit nervous to use the savings (they are my own savings, but I had kept them saved for our family expenditure) However, I can look at paying our holidays next August and by then should also have paid a good chunk of the car off by that time too. 
Thank you everyone for your advice :-)