Computer says NO

Harry1804

Years ago when Martin was singing the merit of credit score agencies I plunged right in with experian and believed it to be a good thing?  Now that I am retired and do not have the thousands of pounds coming annually and with some missed payments on my credit cards I am treated like a pariah.  If the companies that I have applied to for credit purchases had a person instead of the computer I can demonstrated a sound source of income.  THe old fashioned way of talking with the lender has been taken over by the computer. So I am left feeling worthless and the company has lost a sale.  I am not alone and many more may well join me.  We have money in savings and in the bank, and a regular income,and can quite easily afford a monthly direct debit on a purchase over a year of two.  I would like to believe that Martin and the finance companies would advocate for the swaying away from Computer Says NO.

la531983

Even a human could judge the missed payments as seeing you as being uncreditworthy, so it wouldnt make any kind of difference at all.

eskbanker

Harry1804 said:

Now that I am retired and do not have the thousands of pounds coming annually and with some missed payments on my credit cards I am treated like a pariah.

The latter is likely to be far more damaging than the former - no company is forced to lend you money, and failure to repay previous credit in accordance with its terms is unlikely to make you an attractive prospect!

Harry1804 said:

I plunged right in with experian and believed it to be a good thing?

What does that mean exactly - were you paying (unnecessarily) to see your credit files?

Harry1804 said:

If the companies that I have applied to for credit purchases had a person instead of the computer I can demonstrated a sound source of income. 

[...]

the company has lost a sale

[...]

We have money in savings and in the bank

Why don't you buy what you're looking for with the money you already have then?

Exodi

Sorry I'm a bit lost on the relevance of Martin Lewis's suggestion that consumers should take an interest in their credit files to your issue? I can't how it has anything to do with you being refused credit because of missed payments.

If anything, I'd say examples like yours are why it is a good thing -  educating people on their credit files might enable them to work out why they got rejected as the lender does not tell you (though in your particular case it seems pretty obvious).

As is often the case in these types of threads ('I got rejected for a loan, the rules should be changed'), if you have loads of money in savings, then don't take out a loan. You won't earn anywhere close to the interest rate on the loan compared to your savings. If you have a small amount of savings relative to the amount of the loan, then you can see why it's not very relevant to the lender. You could also just spend it all at any moment.

If you have missed payments and a low income, then you are probably not the type of borrower the lenders on the market offering the best rates are interested in.

CliveOfIndia

I fear you misunderstand how lenders assess an applicant's credit-worthiness.  Your data (income, credit history, etc.) are assessed against their own unique lending criteria, and they decide whether or not you represent too high a risk.  Whether the assessment is performed by a computer or a human being is irrelevant, the outcome would be the same.

Savings are not taken into account when assessing an application for credit, for the simple reason that you could go out tomorrow and spend your entire savings pot on a holiday, a fancy car, a super-yacht, whatever.  But a history of missed payments demonstrates that you have, in the past, struggled to meet your repayment obligations - so it's perhaps unsurprising that many lenders would be unwilling to extend you further credit.

Richard1212

I'm sorry , Harry, that you have been met  ( mainly ) with brutal replies often associated with this forum.

But the "gist" of all the replies to your opening post  ( but put in a more polite way) are all valid IMHO. Computers are not to blame, Experian is not to blame, Martin's "good old Experian "days never existed. And when you had the "thousands of pounds" coming in before retirement, did you ever save any of those thousands, so that you would have a cushion to avoid the possibility of defaulting on repayment contracts ?

 So, all I can say to you is "good luck and best wishes".

Time4T_Accounts

I believe that there are credit cards out there for people whose credit records are less than perfect: have you explored those?

la531983

Richard1212 said:

I'm sorry , Harry, that you have been met  ( mainly ) with brutal replies often associated with this forum.

But the "gist" of all the replies to your opening post  ( but put in a more polite way) are all valid IMHO. Computers are not to blame, Experian is not to blame, Martin's "good old Experian "days never existed. And when you had the "thousands of pounds" coming in before retirement, did you ever save any of those thousands, so that you would have a cushion to avoid the possibility of defaulting on repayment contracts ?

 So, all I can say to you is "good luck and best wishes".

There was absolutely nothing brutal in the replies. Honest, yes. Brutal, no. Sugar coating things is pointless. 

sourcrates

I don`t really think the "good old days" you refer too, ever existed to any great extent.

The credit industry has evolved along a very wavy line over the years, from the time when most borrowing had to be backed by some kind of collateral, through the "pre-approved" years when they gave money away hand over fist, and into the most recent period where the computer is king.

There have always been winners and losers, no matter what system of decision making was in use, the current system is far from perfect, but is the most reasonable compromise the industry can currently come up with.

The main reason for automated decision making is because there are a great deal of customers who, for whatever reason, default on their credit repayments, in the last decade, certain companies were lambasted for granting loans which subsequently proved to be unaffordable, where lending decisions were based on profit margins, rather than previous credit history, and they paid for their mistakes by going bust in most cases.

Mainstream lenders saw what was happening, and decided they did not want to go the same way, so even banks such as First Direct, who once prided themselves on the personal touch, no longer, to my knowledge, have a human look at a failed credit application, if computer says no, then its a no, in the jungle its survival of the fittest.

The financial meltdown of 2008 showed how vulnerable banks were to bad debtors, and also bad decision making, such as predatory lending, I could go on with this but I think you get the gist.

Nofinway

sourcrates said:

I don`t really think the "good old days" you refer too, ever existed to any great extent.

The credit industry has evolved along a very wavy line over the years, from the time when most borrowing had to be backed by some kind of collateral, through the "pre-approved" years when they gave money away hand over fist, and into the most recent period where the computer is king.

There have always been winners and losers, no matter what system of decision making was in use, the current system is far from perfect, but is the most reasonable compromise the industry can currently come up with.

The main reason for automated decision making is because there are a great deal of customers who, for whatever reason, default on their credit repayments, in the last decade, certain companies were lambasted for granting loans which subsequently proved to be unaffordable, where lending decisions were based on profit margins, rather than previous credit history, and they paid for their mistakes by going bust in most cases.

Mainstream lenders saw what was happening, and decided they did not want to go the same way, so even banks such as First Direct, who once prided themselves on the personal touch, no longer, to my knowledge, have a human look at a failed credit application, if computer says no, then its a no, in the jungle its survival of the fittest.

The financial meltdown of 2008 showed how vulnerable banks were to bad debtors, and also bad decision making, such as predatory lending, I could go on with this but I think you get the gist.

I was processing loan applications on a computer in the 80's. I remember applying for a loan in the early 80's that was also processed and the decision made by a computer - it's most certainly not the 'most recent period'. 

Harry1804

Pleased to report that two companies have offered support despite what the computer says.t