Can't get credit and don't know why
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JTD2013
Posts: 3 Newbie
Hi all,
I'm looking to get a loan for a car and struggling and I can't figure out why. In terms of credit I already have access to, I have a small overdraft on my current account which I sometimes go into in any given month, but I don't stay in it, and I have a credit card with a relatively small limit on, which, to be fair I've hovered at around utilising half of the limit, but I can clear that next month if needed. I earn £45k p.a., which gives me £2700 net per month, and all my bills, rent and food come to £1300 per month, with rent making up £550 of that - leaving me £1400 disposable income per month. I have been in my current role for 6 months. I don't have savings as I have used this increase in the last few months to clear my student overdraft and other debts and go on holiday, but from now I can start saving. My credit score (I know it's not the be all and end all) is fair, has improved since I clear my overdraft and have paid down some of my credit card.
I would have thought having a lot of disposable income and not much in the way of bills puts me in a decent position to get a loan, but when I do soft checks before application it always says I have a 0/10 chance of being accepted, which I don't understand. Do I need to clear my credit card (about £1000 on it) or get some savings? Or is there something else I'm not seeing? All help gratefully received
I'm looking to get a loan for a car and struggling and I can't figure out why. In terms of credit I already have access to, I have a small overdraft on my current account which I sometimes go into in any given month, but I don't stay in it, and I have a credit card with a relatively small limit on, which, to be fair I've hovered at around utilising half of the limit, but I can clear that next month if needed. I earn £45k p.a., which gives me £2700 net per month, and all my bills, rent and food come to £1300 per month, with rent making up £550 of that - leaving me £1400 disposable income per month. I have been in my current role for 6 months. I don't have savings as I have used this increase in the last few months to clear my student overdraft and other debts and go on holiday, but from now I can start saving. My credit score (I know it's not the be all and end all) is fair, has improved since I clear my overdraft and have paid down some of my credit card.
I would have thought having a lot of disposable income and not much in the way of bills puts me in a decent position to get a loan, but when I do soft checks before application it always says I have a 0/10 chance of being accepted, which I don't understand. Do I need to clear my credit card (about £1000 on it) or get some savings? Or is there something else I'm not seeing? All help gratefully received
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Comments
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Why do you enter your overdraft ?
Should stop entering it really.0 -
Are you on the electoral roll?
Do you move around a lot?
Have you previously missed payments, had late payments, had defaults, CCJ, IVA, bankruptcy?
Have you read the content of your credit reference agencies reports? ( Credit karma, Clearscore and MSE credit club)
Going into your overdraft on your salary shouldn't be happening.
How long have you had your credit card for? How many limit increases have you had in that time?
Do you bank with a regular bank / buildings society? Have you applied to them for a CC as they see your wages going through your account.Mortgage started 2020, aiming to clear it in 2026.0 -
Lenders won't believe you have any disposable income if you're carry a steady debit on your card, unless it's at 0%. They'll therefore realise you can afford any more debt.
Get it cleared and keep clearing every month. Also stay out of your overdraft.
Make sure you check your three credit files to make sure everything is ok with them.
You'll then be in a much better position.0 -
@MovingForward @DCFC79 @zx81 - thanks for your posts. I'm on the electoral roll and have had 2 addresses in the last 3 years. No missed payments in the last couple of years (a few whilst I was at uni but nothing since graduating). Had the credit card for 7/8 years, probably 3 credit increases but nothing in the last 5 or so years. I bank with Nationwide and have done for 9 years or so, I know they are quite strict with their lending criteria.
So I guess I need to clear my credit card next month and then avoid my overdraft for a few months? Both very achievable with a bit of discipline I guess! Does anyone know how long it would then take to have an effect on my eligibility or is that a bit "how long is a piece of string"?0 -
It’ll start helping a bit from the first time it’s reported, and will help more from each month that it continues, but there’s no way to tell when the improvement leads each company to view you as the right side of the line for obtaining credit.0
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I have a credit card with a relatively small limit on, which, to be fair I've hovered at around utilising half of the limit, but I can clear that next month if needed.
I have a small overdraft on my current account which I sometimes go into in any given month,
You may have £1400 disposable income per month but you are using your overdraft and have an interest bearing balance on a credit card with a relatively small limit.
However, having said this, the 0/10 chance of being accepted raises questions. The above two factors may be negatives but they should not be causing eligibility checkers to return a result of 0/10 eligibility and is something that I also do not understand from the information provided.0 -
@Ben8282 thanks, that's what I thought. I'm going to clear my credit card at the end of the month and avoid my overdraft, but I cannot understand why my chances are so low on the soft checks, as my credit score is fairly good and I know others use loans to consolidate debt at a greater level than I have. it makes me think something else is up but I don't know what or how I can get that info0
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You need to check your three credit files to ensure that all data recorded on your files is accurate....I cannot understand why my chances are so low on the soft checks, as my credit score is fairly good and I know others use loans to consolidate debt at a greater level than I have. it makes me think something else is up but I don't know what or how I can get that info
Ignore your 'credit score' as lenders don't use it and don't see it either. Just focus on building positive data in your credit files by demonstrating you can successfully manage credit.
I work within the voluntary sector, supporting vulnerable people to rebuild their lives.
I love my job
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@MovingForward @DCFC79 @zx81 - thanks for your posts. I'm on the electoral roll and have had 2 addresses in the last 3 years. No missed payments in the last couple of years (a few whilst I was at uni but nothing since graduating). Had the credit card for 7/8 years, probably 3 credit increases but nothing in the last 5 or so years. I bank with Nationwide and have done for 9 years or so, I know they are quite strict with their lending criteria.
So I guess I need to clear my credit card next month and then avoid my overdraft for a few months? Both very achievable with a bit of discipline I guess! Does anyone know how long it would then take to have an effect on my eligibility or is that a bit "how long is a piece of string"?
No, avoid using your overdraft FOR EVER AND A DAY, just don't use it at all.(Although I could be wrong, I often am.)0
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