£150k income but struggle for finance

Mitchiet123 · 16 February 2019 at 8:37PM

Hi all,

Just wondering if anyone knows why I struggle to get finance? I make £150k a year, total Bills are under £1k a month
I am 24 though so dont know whether that makes any difference.

I was turned down for an £11k loan last year, and I've just had a referred application for a £30k personal loan. My car lease a couple of years ago was referred and I had to battle it out with underwriters to get it approved (under £300 a month)...

Does anyone have any tips on how to get approved easier?

pinknsparkly · 16 February 2019 at 8:48PM

Do you have/have you had any credit facilities? Credit card? Overdraft? It sounds like your problem is a lack of credit history. It seems absolutely bonkers, but without a credit history to prove that you can and do pay back money that you've borrowed, lenders have to assume that you won't pay the money back (since there's no evidence to prove that you will). I'd suggest you start by getting a credit card (perhaps with the bank you hold your current account with as they will at least be able to see your salary going into your account each month). You may be given a really low limit, but make sure you use it every month and set up a direct debit to pay it off in full each month. Make sure you don't let the amount you owe on the card get anywhere close to the limit (e.g. if the limit is £500, I'd only spend around £50 - £100 a month on it).

The other thing to do is to check your credit history all three credit reference agencies (Equifax, Experian and CallCredit) to make sure they've not got any incorrect details on your file. Every lender will check one of these three agencies when deciding whether to lend you money or not. You can check all of them for free (use Noddle to check CallCredit, ClearScore for Equifax and MSE's Credit Club for Experian).

Mitchiet123 · 16 February 2019 at 8:59PM

I have a credit card that has a £7200 limit on it and I use it regularly but max I have gone up to is £6k but pay it off every month before interest hits me.
My Experian score is massively high but my noddle is average and clearscore is dreadful but not sure why.
I've never missed a payment, I have had a fair bit of finance just like utilities, phone Bills etc and 1 car finance.

I also have a premier Barclays account and a £4.5k overdraft which I go into every now and again but clear straight away.

The only thing is I have lived in 1 house for 20 years and then the last few years I have lived in 3 or 4 houses (due to moving around for work). About 1-1.5 years in each house.

I'm stuck as to how to improve.....

Mitchiet123 · 16 February 2019 at 9:02PM

Oh and a £2k loan on 0% from 3 and a half years ago which I only have a few hundred pound left on and never missed a payment.

GDB2222 · 16 February 2019 at 9:09PM

I am puzzled why you need a loan. Your surplus income over bills is around £10k a month, perhaps less some tax. You certainly don't have to justify yourself to me, but possibly the lender is having the same thoughts?

[Deleted User] · 16 February 2019 at 9:10PM

If you earn £150k a year then you do not need any credit. Don't fall into the trap of spending more than you earn.

somethingcorporate · 16 February 2019 at 9:38PM

What happens to the £5-6k a month you are left with after bills...?

Mitchiet123 · 16 February 2019 at 9:42PM

I invest a fair bit, Therefore I dont have £40k lying around to spend on a car (and if I did it would go to better use earning me interest in Investments or buy to lets). Want to finance an M5 by putting £10k down and using £30k personal loan as I realise a £40k personal loan is not typical and probably hard to get.

Is there something I'm missing RE credit scores and lenders criteria?

somethingcorporate · 16 February 2019 at 9:44PM

Are you on the electoral roll? how stable is your income? are you a homeowner? have you had a history of finance (no credit history can be as bad as a poor one). Lots of factors.

Have you considered HP where the loan is secured on the car? these tend to be less onerous from a credit checking perspective. Alternatively, wait 6 months and buy one outright?

pinknsparkly · 16 February 2019 at 9:44PM

You need to investigate why your ClearScore and Noddle credit ratings are low in comparison to Experian and look at your reports from them in detail. Are they showing any defaulted payments on your account? Any available credit that you don't have? The reports should have suggestions as to how you can improve your credit rating.

Have you updated all of your accounts to your current address? Are you registered to vote at your current address?

It sounds like you don't actually have a problem getting finance, if you already have a credit card with a limit of £7200 and a £2k loan. More that the lenders you are applying to are nervous as to why on such a high income you are wanting to take out unsecured loans.... After tax and student loan repayments, but without pension contributions, you should be taking home around £6.5k a month, which is £5.5k a month surplus to what you need to live on. On that income, applying for a loan of £11k (2 months worth of surplus salary) is bound to sound some alarm bells with lenders!

Mitchiet123 · 16 February 2019 at 9:54PM

Thanks for the tips everyone. I will investigate. Will look at the HP secured on the car- Not sure what that is (just dealer finance I presume? )Usually looks more expensive interest wise which doesn't appeal.

It shoudnt be this hard to get a small loan!

£150k income but struggle for finance

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