My experience when borrowing for the first time

astroL

Technically it was the second time; I first borrowed abut £2,000 some decades back and it was repaid well on time. This time we decided to take out a personal loan to supplement trading in a good car and adding a cash sum.  I approached my usual bank First Direct. They advertised loan decisions in three minutes or so.  I first checked my credit rating (999) and then filled in the form.  Nothing.  After waiting for some time I finally received a notification that they were 'doing checks'....  After a longer wait I rang them up.  No, was the answer, we are looking into your entire credit history and this will take several days so a decision will be made sometime next week.  I pointed out that this was not acceptable because I would lose the desired car and it broke their assurance.  Within a few minutes I got them to confirm that they were asleep on the job - and withdrew my application, having by now lost the car.

I was not a happy person with First Direct.  I have never been offered the opportunity to review this firm, but had I done so, up until now it would have been good.

My second car choice was in fact of rather better spec but more expensive.  I checked MSE lists and selected Sainsbury's Bank under the same circumstances.  I needed to borrow slightly more for this car. After completing the details there was a pause of about 60 seconds and then my loan request was approved. I received a notification that the money would be in my nominated account within 24 hours.  I then went ahead and confirmed the purchase of the car. When I logged into my bank account early next morning, there was the money.

First Direct: 1/10

Sainsbury's bank 10/10.

It is impossible to understand the attitude of First Direct.  We have maintained a surplus in the account over some years and there is no conceivable reason for their 'don't give a damn about loyal customers' attitude.  We will be changing our account a.s.a.p.

Lawrence H

[Deleted User]

First Direct weren't happy with the risk you posed. Your 999 credit rating was irrelevant to them.

It's hardly fair to describe them as not giving a damn about their customers when they're not keen to give loans unless they're sure their customers can afford them. 

astroL

This is quite laughable.  We have over 10 times the amount requested and could easily have paid cash for the entire transaction - but we chose not to.  We own our home and have minimal outgoings. It really is a laughable situation with even FD knowing that we had a substantial surplus in the current account.  No excuses needed for FD, they are simply not looking at reality. Clearly SB took a more realistic view.  Whatever could have made them supposedly 'doubt' our ability to replay makes me laugh uncontrollably.  I suspect that they looked at us as the 500,000th customer and decided to throw the book at us.   They missed....  Had they rung me up we could have laughed together about their mistakes but they did nothing.

[Deleted User]

astroL said:

Whatever could have made them supposedly 'doubt' our ability to replay makes me laugh uncontrollably.  

That doesn't sound like an entirely normal reaction.

Perhaps there is something in that which caused them to be concerned about lending to you.

[Deleted User]

The credit "score" you see is never seen by a lender, they only judge based on the data on your file which they score internally and whether you fit their criteria for lending. Clearly you don't so you got a loan elsewhere, I wouldn't worry about it

benbay001

From their website "decision in minutes".

Well they did make a decision in minutes, just far more minutes than you deemed acceptable.

Tbh you sound very angry over very little, next time youre going car shopping for something rare and unmissable, get the money lined up in advance.

Rich_richardson

By the sounds of it, they failed to see enough satisfactory evidence to justify you being a risk worth taking at first glance.

Having little or no borrowing history / A bad lending history / A good lending history are different things and different organisations have differing lending criteria. Someone who's borrowed regularly and repaid as per plan probably has a fairly positive history. Someone who hasn't is basically an unknown. Unknown to a lender won't necessarily be an attractive proposition, maybe hence them taking a closer look first.

Also, your current assets aren't necessarily visible to them - after all nothing stops you loosing your marbles and putting it all on the next horse iyswim. This is the only reason I keep a credit card and pay it off in full every month.

I wouldn't read much into it personally. 

On a separate note, if there was a time constraint and you were dead set on the car, why not just by the car in cash as you said you could and sort the loan out after?

astroL

There are several factors here.  We cashed in a long-term savings account for the balance but they surprised us by saying it would take eight days instead of just the few expected. Electric cars were vanishing from my short-list - hence the loan.  FD made no attempt to contact me.  We did not wish to disturb our main assets, some of which included reliable family loans.  The loan was insignificant to us as a % of our total assets.  FD had everything needed showing that we had a very healthy surplus .... but we saw no reason to disturb our finances when we could borrow a small sum at 1.5% interest!  SB clearly took at realistic view of the *same figures* and said yes. The facts speak for themselves.  FD picked us out despite al the evidence (eg., cards always paid off monthly for >10 years) but chose to select us probably due to yet another faulty algorithm.  I do take it personally because we have been with them for so long, at one time having more in credit than the loan requested.

[Deleted User]

astroL said:

 I do take it personally because we have been with them for so long

There's your problem.

You have a fundamental misunderstanding of how credit works. It's not longevity that matters, but risk. There's no personal aspect to it at all.

But at least you'll know better for future borrowing applications. 

porkisnotmeat

astroL said:

There are several factors here.  We cashed in a long-term savings account for the balance but they surprised us by saying it would take eight days instead of just the few expected. Electric cars were vanishing from my short-list - hence the loan.  FD made no attempt to contact me.  We did not wish to disturb our main assets, some of which included reliable family loans.  The loan was insignificant to us as a % of our total assets.  FD had everything needed showing that we had a very healthy surplus .... but we saw no reason to disturb our finances when we could borrow a small sum at 1.5% interest!  SB clearly took at realistic view of the *same figures* and said yes. The facts speak for themselves.  FD picked us out despite al the evidence (eg., cards always paid off monthly for >10 years) but chose to select us probably due to yet another faulty algorithm.  I do take it personally because we have been with them for so long, at one time having more in credit than the loan requested.

Sainsbury's didn't have access to the *same figures* though.

aoleks

Here we go again with the affordability crap… have you ever thought that banks have badly tweaked algorithms for assessing risk?