Moneysavingexpert.com/ Your Credit Rating discussion area

mdoy79

I have a default on my equifax account from Orange.. it was a late bill that has now been satisfied, I also have one from student loans which has been settled.

What are the implications of this? I just got turned down for a TSB current account.. I take it a car loan or a mortgage are out of the question for the next 6 years then? I'm 33, that will take me up to my 40's

Seems harsh for a couple of minor financial mistakes, all for the sake of about £26 as well what a joke.

Jamesdusk

I recently joined Equifax to check my credit rating before applying for a personal loan with Zopa. I have a good score, with mostly 'excellent' reports with only two 'goods' and one 'fair', which was because I've recently moved and creditors prefer two or three years of residence.

The blurb underneath my score said "Your score is highly predictive that you would be a good candidate for credit. Most credit grantors would consider this score good.", yet my loan application for £4000 was declined.

I was then contacted by Freedom Finance who ran an application for me, but the same occurred. When I asked if I was perhaps aiming too high and should go for a lower amount, I was told that no lenders wanted to offer me anything! Obviously they couldn't tell me why I was declined, but going on my credit score it doesn't really make any sense??

The only thing I can think might be affecting things is the fact I have recently opened a joint account with my partner and she has a pretty bad credit rating to my knowledge. Would the fact that she's regarded as a 'financial associate' be the reason for my unsuccessful loan applications?

Edit: I also have a 'last chance saloon' type loan with LloydsTSB which was taken out back in 2006 when I'd gotten into a bit of bother with my overdraft, could this also be a factor?

Hazzinho

The financial association to your partner with bad credit will not help you, that is a factor. Get on the electoral roll if you're not on it as that is confirmation you live at the address provided. Finally your debt including the loan amount required needs to be under 50% of your annual salary otherwise you are deemed high risk.

Jamesdusk

Okay thanks. The outstanding loan amount is around £890, and I have a similar figure outstanding on an electrical goods purchase, so the total amount is way under 50% of my annual salary. Could the fact that the loan was a 'crisis loan' so to speak be a factor, or would that information not be relevant when they did the credit check?

I'm already on the electoral roll at my new address but only since last August which is showing as 'fair' (as opposed to 'good' and 'excellent').

Hazzinho

I doubt it's the loan,i think the biggest negative will be the association to be honest, how bad is bad, have you seen their credit file, lenders will take this into account on occasion as they may get alerts about a bad debt associate. Some lenders are less strict than others so you might be accepted elsewhere. Remember not to make too many credit applications in a short space of time as that is negative too. Good luck!

Jamesdusk

Thanks again then, a great help. Last question, would the Freedom Finace application be classed as a credit search, same as the Zopa one equalling two recent searches?

Hazzinho

It depends if they were both credit searches or soft searches, I'm assuming they will both be credit searches. Lenders don't know if you've been approved for previous applications which is why multiple recent searches for credit are negative. Different lenders use different CRA's so the searches may not show on some of them.

Jamesdusk

So if I was to take myself off the joint account how long would it take for the 'disassociation' to filter through onto my credit profile?

Hazzinho

If you were removed from the account you'd have to wait around a month for the change to appear, you'd then have to dispute the association with whichever CRA you are using as they don't automatically drop off.

Jamesdusk

So if I was to get myself removed from the account this week, in a months time I would then have to dispute the association with Equifax which would then take how long to be amended?

Also when all this is completed would it be worth attempting another loan application with two recent searches, or would it be wiser to wait a few months?

Thanks again for your help, much appreciated