refused loan

GC62237

Anybody got any ideas??? I have just applied for a personal loan and been refused credit for the first time in my life!! both with Tesco bank who I have a credit card with and pay the balance off monthly and with Santander who I have 2 bank accounts with, both which are in credit. I have a top notch credit rating, never had a single default in 22 years. I've had several loans and mortgages (got my first mortgage at 19 and I'm now 40) and have worked for local government for 19 years earning a good wage. I have checked with Equifax and Experian both of which show no defaults or adverse credit and according to them I'm only using 20% of the credit available to me. I will be writing to Tesco and Santander to appeal the decision and enclosing copies of my credit report but I would appreciate it if anybody has any knowledge on why this could have happened??. 

[Deleted User]

Lending criteria have tightened recently.  Your top notch credit rating is of no interest to lenders - it's all about risk and profitability.

Check your Transunion file as well, but if two lenders have declined you, simple affordability is likely to be the issue in the absence of other issues.

You can put in a complaint if you wish, but there's no need to send your credit reports.  They already have them.

lordmountararat

We live in strange times and lenders are starting to become very cautious. No one knows what the future holds. Your refusal is nothing personal, just a reflection of how things are at present.

cymruchris

As you've completed two full applications - you might want to hold off applying for any more loans just yet. Are the loans for debt consolidation or for another unrelated purpose? Without divulging your salary - what's the total debt you have as a percentage of your salary? It may be that although you're only using 20 percent of your available credit - that 20 percent may be perceived as being too high as a £ note figure as a percentage of your salary.

Nobody knows for sure - but there's no doubt that money isn't as freely available as it was before Coronavirus was a thing. As outlined though, you might want to just ensure all of your files are up to date, and check that there's no nasties hiding anywhere in there. If all's ok - maybe wait a couple of months and try some eligibility checkers before going through full applications. 

GC62237

The loan was relatively small all things considered and is for home improvements. Overall we have very little debt, house is worth a lot more than the mortgage on it, we have no childcare costs etc and only have a loan on our family car at present. We actually have more money in the bank than we wish to borrow but we didn't want to clear our bank accounts out at the moment. The monthly repayments are small in relation to money coming in. I understand that Santander will not take the amount we have in the bank into consideration when asking for a loan from them. I have spoken to someone at Equifax who cannot see any issues on the credit report. I thought Covid may be the issue, I'm guessing lenders are a very hesitant at the moment. 

cymruchris

Nobody other than your own bank sees what you have in your current or savings account, and normally whatever is in them forms no part of any lending decision. I would wait a couple of months, try eligibility checkers directly on banks websites, and then only make another application if you come up as highly likely or pre-approved. (Did you use the eligibility checkers this time - or just go straight into applications?)

GC62237

I went straight into applications as I always have done. I honestly did not think there would be an issue. I have borrowed more in the past from Santander when I had a much smaller income with no problems. I will just have to ask for cash into my bank account from a credit card I currently have (which has a zero balance) and use some of the money we already have in the bank then try again in 3 months

cymruchris

GC62237 said:

I went straight into applications as I always have done. I honestly did not think there would be an issue. I have borrowed more in the past from Santander when I had a much smaller income with no problems. I will just have to ask for cash into my bank account from a credit card I currently have (which has a zero balance) and use some of the money we already have in the bank then try again in 3 months

We haven't had coronavirus when you last made applications though - the financial landscape has changed for the moment. Definitely use the eligibility checkers before you next make an application. You can do those as often as you like without causing any credit file impact - as long as you don't move on to a full application.

jonesMUFCforever

Most banks have a 'soft' search facility in their apps or internet banking. Have a look at these before making more applications.

alfiecomp

Similar thing has just happened to me - interest free credit to buy a laptop.  I have an excellent credit score and no issues with finance.  The company it went through are called Divido, who when I checked after have a string of similar complaints and direct you back to the retailer as they are a software company not the proposed lender.  Certainly didn’t seem so on application.  I have contacted the retailer.

 I will buy laptop out of savings but I am concerned over the mark left on my account as a result of this.  Checked Experian after this and its fine and lenders would be willing to lend money to me if required.  What concerned me however was 0% chance of Halifax lending which was in dire contrast to others - what is so different with Halifax?  Others on a search online also had an excellent Experian report and were also just looking to take advantage of interest free credit, what is going on?

[Deleted User]

What's going on us that each lender assesses you for risk by their own criteria.

Nothing to do with your credit score and remember that not every lender uses Experian. Check all your files to see what may causing problems.