LOAN INTEREST RATE DIFFERS FROM ADVERTISED RATE

[Deleted User]

I have applied for two unsecured loans, one from Sainsbury's Bank, and one from the AA. Both the loans were advertised at 3.1% APR. I was offered a loan of the amount requested ( £12.5k) by both companies, but at 9.9% APR.
I know that banks have to offer loans at the advertised rate to only 51% of successful applicants, and I accept this. However, when I asked what circumstances resulted in the loans being offered at a higher rate than the advertised rate they refused to tell me, saying it was confidential company information. I made a formal complaint, and after 7 weeks I have received a response which provides me with no further information other than the loan application has been checked against their 'score card' system to determine the application decision. They also mentioned that providing me with a specific reason would involve revealing their internal credit policy which was commercially sensitive information. All I want to know is specifically why I cannot be offered the advertised rate so I can try to rectify the issue.
I am a home owner with no mortgage, I do not have any other loans, I have a credit card which I pay off fully each month whenever I use it, and I am in full time employment. My credit score with Experian is in the high 900's. I have never had any bad debts or been declared bankrupt. With this sort of track record, I fail to see what else I can do to meet these companies requirements.
Other than taking my complaint to the financial ombudsman, who are extremely busy at the moment, is there any other way I can insist the banks give me a specific reason for their decision.
Any advice would be appreciated.

MrFrugalFever

This is often where they get you. Sometimes your own bank is a better chance of getting what is advertised as they know you better. Depending on what the personal loan is for, other options could be used to guarantee lower rates.

from what I’ve read on here so far, it appears that if you are squeaky clean you’re actually at a slight disadvantage! 

[Deleted User]

They won't tell you why didn't get the headline rate and FOS won't ask them to. Lending criteria are confidential.

So in short, there's nothing you can do to insist they tell you. You may be too high risk or you may not meet their target population.

But look through your three files (ignore the pretend scores) to ensure that everything is correct.

Ebe_Scrooge

As ZX81 says, you'll never know the reason.  Not least because any lender's internal scoring criteria are, as you've already been told, confidential and commercially sensitive.

It's most likely your credit score that's the problem - 900 is rubbish, it needs to be at least a million. <I am, of course, joking - lenders can't even see your made-up score.  They do have their own internal scoring system, but that's a completely different beast entirely>

In the absence of any nasties lurking on your credit files, it may be just something as simple as affordability - size of loan compared to income.

But ultimately you'll never know the workings of their scoring algorithms - if they were public knowledge, then you could just tweak your application to make sure you fitted their "ideal" lending profile.

[Deleted User]

You were never going to get the lender's criteria as that would allow people to game the system and get credit they shouldn't be able to

DCFC79

We have no idea whats on your 3 reports, yes Experian rate you in the high 900's but what do the others rate you as ?

As you have found out your score has no bearing on loans or anything financial, your history is what matters.

macman

The never said you could get 3.1%: that's just the representative rate (which you appear to already know). They then looked at your credit history and decided that your risk profile means that the best rate they could offer you was 9.1%. How you think that constitutes a case for the Ombudsman is beyond me. It's purely a commercial decision.

Presumably the loan you want is simply too high based on your income (which you have not disclosed), or because of something else showing on your credit history?

[Deleted User]

Happy4u said:

I have applied for two unsecured loans, one from Sainsbury's Bank, and one from the AA. Both the loans were advertised at 3.1% APR. I was offered a loan of the amount requested ( £12.5k) by both companies, but at 9.9% APR.
I know that banks have to offer loans at the advertised rate to only 51% of successful applicants, and I accept this. However, when I asked what circumstances resulted in the loans being offered at a higher rate than the advertised rate they refused to tell me, saying it was confidential company information. I made a formal complaint, and after 7 weeks I have received a response which provides me with no further information other than the loan application has been checked against their 'score card' system to determine the application decision. They also mentioned that providing me with a specific reason would involve revealing their internal credit policy which was commercially sensitive information. All I want to know is specifically why I cannot be offered the advertised rate so I can try to rectify the issue.
I am a home owner with no mortgage, I do not have any other loans, I have a credit card which I pay off fully each month whenever I use it, and I am in full time employment. My credit score with Experian is in the high 900's. I have never had any bad debts or been declared bankrupt. With this sort of track record, I fail to see what else I can do to meet these companies requirements.
Other than taking my complaint to the financial ombudsman, who are extremely busy at the moment, is there any other way I can insist the banks give me a specific reason for their decision.
Any advice would be appreciated.

Ask Experian for a loan then since they rate you so highly. 

As everyone else has said, the algorithms and analysis lenders use to access applicants is confidential and complaining to the financial ombudsman won’t change that. If the Le ding criteria was made public people would just poggle the application. 

Jamesyb123

Very few people will ever get the promotional rate it’ll be for customers with near perfect credit histories. The percentage does seem a little high however if you have a good credit history maybe just shop around rather than wasting time complaining as it won’t get you anywhere 

[Deleted User]

Jamesyb123 said:

Very few people will ever get the promotional rate it’ll be for customers with near perfect credit histories. The percentage does seem a little high however if you have a good credit history maybe just shop around rather than wasting time complaining as it won’t get you anywhere 

51% of successful applicants isn’t very few it’s the majority of successful applicants. 

Jamesyb123

Lover_of_Lycra said:

Jamesyb123 said:

Very few people will ever get the promotional rate it’ll be for customers with near perfect credit histories. The percentage does seem a little high however if you have a good credit history maybe just shop around rather than wasting time complaining as it won’t get you anywhere 

51% of successful applicants isn’t very few it’s the majority of successful applicants. 

It’s not a huge amount really as there will only be a certain pot of eligible customers anyway so as a percentage high yes but the amount of customer fen eligible for a loan at that cheap of an APR wouldn’t be massive