Problem getting a new personal loan and also appyling for a credit card.

The_Fella_London

I work full time and get a reasonable salary. I am also lucky enough to live in a property mortgage free, and have the usual monthly outgoings. I already have both a personal loan and a credit card - I have not missed any payments on the loan, and always make the minimum payment on my card, sometimes more. However when I recently tried to increase the amount of my loan by a small amount, I was told that this could not be offered to me at this time. I was also turned down for a small loan with another provider (despite it being the top suggestion from a 'loan eligibility calculator'). I then tried the credit card route, and this was also declined. I have checked my free Equifax report, and my credit score has come up as good, one down from the top band. I don't understand, therefore, why I would keep getting turned down for credit? One final point - my Equifax report indicated I had one credit card (correct) but four loans, which is not true - I only have one loan at present. Can anyone offer me any help or suggestions regarding this? Both in terms of finding out what the problem is and also suggestions for securing a loan? Thanks in advance.

eskbanker

Let's start with the standard observation that your 'credit score' is simply a made-up number created by agencies, that isn't seen by potential lenders, so don't pay much attention to that.

However, what you should pay attention to is the factual accuracy of what's visible on your credit files, so if there's something Equifax shows against you that isn't true then you should dispute it with them, assuming these are loans that you have paid off, rather than some that may have been taken out in your name without your knowledge, which would take things in an entirely different direction.

Check your files with the other agencies too, as they may be different from what's reported to, and by, Equifax.

In terms of obtaining more credit, you may be struggling because of how lenders perceive affordability - you describe your salary as 'reasonable' but you're apparently repaying existing debt slowly and feeling the need for more credit too, so in itself that's not a good situation....

The_Fella_London

Thanks for your quick response! I have subsequently found out something quite interesting, that I wasn't aware of. Two of the other 'loans' listed on my report are in fact mobile device plans through O2 - one for a phone, one for an iPad. I had no idea these would be considered loans, but obviously are? Again I have kept up with repayments, and surely there are many people who have this kind of credit. I still don't know about the fourth loan, although I did pay off in full one towards the end of last year, and maybe they take a few weeks to update the report. And yes, I can understand how my situation could be perceived. Is there anything one can do to help such a situation, short of paying everything off quickly, which I am currently unable to do?

BoGoF

Yes, many people have similar ougoings but it's all relative. You don't say what your income is or how much these outgoings are but lenders may think you are stretched.

Regarding the receny settled loan, it can take up to 6 weeks to be reflected on your file. However you will now have 2 hard searches recorded on your file which doesn't help your situation. My advice would be no more applications for 6 months.

You seem to be in a fortunate situation living in a mortgage free property so maybe you need to look at why you seem to reliant on credit, no judgement from me but just an observation.

MrFrugalFever

The_Fella_London said:

I work full time and get a reasonable salary. I am also lucky enough to live in a property mortgage free, and have the usual monthly outgoings. I already have both a personal loan and a credit card - I have not missed any payments on the loan, and always make the minimum payment on my card, sometimes more. However when I recently tried to increase the amount of my loan by a small amount, I was told that this could not be offered to me at this time. I was also turned down for a small loan with another provider (despite it being the top suggestion from a 'loan eligibility calculator'). I then tried the credit card route, and this was also declined. I have checked my free Equifax report, and my credit score has come up as good, one down from the top band. I don't understand, therefore, why I would keep getting turned down for credit? One final point - my Equifax report indicated I had one credit card (correct) but four loans, which is not true - I only have one loan at present. Can anyone offer me any help or suggestions regarding this? Both in terms of finding out what the problem is and also suggestions for securing a loan? Thanks in advance.

You, nor anyone on this forum will know the reason for your declined applications but what you have mentioned above could be a significant factor. This could almost fall in to the 'persistent debt' category and that in itself is a red flag to lenders.

As mentioned above, check ALL THREE credit reference agencies, you do not need to pay as Statutory Credit reports are free and can be requested at any time. Experian uses snail mail for their code but Equifax and Transunion are almost instant online. 

Go through your files with a fine toothed comb, check absolutely everything even down to exact dates and cross check the 3 files (I downloaded all 3 of mine to PDF and printed because I wanted to mark on them etc). Dispute anything you are certain is wrong. Irrespective of how your accounts are categorised on your reports (loans/credit cards) it is the history of account management, level of debt vs disposable income and number of credit applications that will have a significant impact to the lenders view of you.

Brie

Anything that has a credit agreement attached will normally show up in your credit reports.  So that can include insurance that you pay monthly as well as tech repayment plans.  And looking for insurance can cause credit searches to be added as well.  I've seen some reports where there might be 20 or 30 when someone was trying to renew the car insurance.  Likely all soft searches but it adds up.  So if/when you apply for credit again you might want to wait for a few months after any insurance renewals.  

BoGoF

Brie said:

 I've seen some reports where there might be 20 or 30 when someone was trying to renew the car insurance.  Likely all soft searches but it adds up.  So if/when you apply for credit again you might want to wait for a few months after any insurance renewals.  

Soft searches are not visible to anyone but yourself so it's only hard searches you need to take into account.

OP was asking questions back in 2021 about tracking their spending as they had no idea where the money was going and should in fact have money left over. I suspect not much has changed on that front.

Vinknut

"always make the minimum payment on my card, sometimes more"

That is often indicated on a credit report if you make on/around the minimum payment.

How much credit do you have available and how much of it are you using?

I think, on balance, not lending you any more is a good thing, for both you and the lenders - a reasonable salary and no mortgage, what do you need additional credit for?

MEM62

BoGoF said:

You seem to be in a fortunate situation living in a mortgage free property so maybe you need to look at why you seem to reliant on credit, no judgement from me but just an observation.

My thought also.  OP, being mortgage free and with a 'decent' salary, you should be in a position not to rely on credit.  In particular, having a credit card balance on which you are paying the minimum or just above it, in your circumstances is not good.  Again, no judgement, just a suggestion that you may want to look at your reliance on borrowing.        

Superhoopza

Vinknut said:

"always make the minimum payment on my card, sometimes more"

That is often indicated on a credit report if you make on/around the minimum payment.

How much credit do you have available and how much of it are you using?

I think, on balance, not lending you any more is a good thing, for both you and the lenders - a reasonable salary and no mortgage, what do you need additional credit for?

Is this true? Will it say minimum payments are being made on the account, not just the balance each month?

BoGoF

Superhoop91 said:

Vinknut said:

"always make the minimum payment on my card, sometimes more"

That is often indicated on a credit report if you make on/around the minimum payment.

How much credit do you have available and how much of it are you using?

I think, on balance, not lending you any more is a good thing, for both you and the lenders - a reasonable salary and no mortgage, what do you need additional credit for?

Is this true? Will it say minimum payments are being made on the account, not just the balance each month?

Yes, there is a minimum payment marker