• This topic has 21 replies, 17 voices, and was last updated 1 month ago by argee.
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  • How much damage have I done? Loan content
  • Premier Icon thestabiliser
    Free Member

    Just got knocked back for a loan 25k to roll up loan credit card and fund final phase of a construction project. Credit rating of 975 (experian) checked immediately beforehand. Back to zero, utter devastation?

    Premier Icon SSS
    Free Member

    I think the real damage gets done if its 3 or more rejections consecutively….. just have to try somewhere else, there is such a thing as being ‘too creditworthy’ to some companies (read they wont make as much money from your whatever way)

    Premier Icon Cougar
    Full Member

    It might be worth a call to Experian. That sounds like it might be a mistake.

    Premier Icon LimboJimbo
    Full Member

    The quick answer is probably not much.

    It’s not the decline that affects your ‘score’ it’s the search. Credit companies generally don’t share details of rejections unless there is suspicion of fraud. Searches are always shared via CAIS and too much activity in too short a period can scupper you.

    Secondly, don’t worry too much about your Experian ‘score’ it’s a vague indication at best. Lenders will use their own scoring as just one element of their decision making, the others being affordability and trace. These will vary in their weighting from lender to lender, it may be the company you tried doesn’t like the CC consolidation, for example, so you may find you have more luck elsewhere.

    Premier Icon P-Jay
    Free Member

    Secondly, don’t worry too much about your Experian ‘score’ it’s a vague indication at best.

    Absolutely this.

    Also, the answer is not much.
    Years ago, and I’m talking late 90s to early 2000s we might kick back a customer for being ‘credit hungry’, lots of applications, lots of activity can look like someone spiralling towards bankruptcy.
    A lot has changed since then, more and more businesses are running checks and consumers are shopping around a lot more.
    There’s not more onus on ‘too many hard searches’ these days.
    When it comes to ‘scores’ is a lot less vague then the CRAs would like you to think, prime lenders are looking for near zero fuss, so no missed payments, certainly no defaults or anything like that, the odd late payment is okay, shit happens. Anything over 700 is okay, into the 900s and you won’t fail anything due to history (accepting it’s only a rule of thumb anyway).
    These days, it’s just as equally about affordability and forecasting, it doesn’t matter if you’ve paid everything on time and you’ve got a ‘999’ rating (which even I held for a few months once) if you don’t earn a healthy margin over your outgoings, they won’t lend you any more.
    Pre-Credit Crunch when we first started to really use affordability, it was amazing how many people could only afford their lifestyle by borrowing more and more on credit cards each month and then re-financing when they renewed their mortgage.
    I would guess with the cost of living rising fast banks are revising their affordability criteria very quickly now. A recession however ‘technical’ seems almost certain and they usually come with a cooling house market, (signs of that already) so they will also be less keen to lend to people with rising debt levels, and with 50% of households in the UK currently borrowing money to make ends meet… lending is going to be getting harder and harder.

    Anyway, more practical advice, sign up for the MSE Credit Club, it will only give you the same data as Experian, but it should be able to match you to lenders who ‘like’ you as a type of customer.

    Premier Icon molgrips
    Full Member

    I was in the absurd position that I couldn’t borrow money at a much lower rate and monthly payment to pay off credit cards on the basis that I couldn’t afford it. **** sake. Sorted now though fortunately by other means.

    Premier Icon leffeboy
    Full Member

    it was amazing how many people could only afford their lifestyle by borrowing more and more on credit cards each month and then re-financing when they renewed their mortgage.

    50% of households in the UK currently borrowing money to make ends meet

    Consider my gob smacked.

    Premier Icon LimboJimbo
    Full Member

    I was in the absurd position that I couldn’t borrow money at a much lower rate and monthly payment to pay off credit cards on the basis that I couldn’t afford it. **** sake.

    But then you would have a loan for the same amount as your previous CC debt and the same cards would have a zero balance ready to be maxed out the very next day. You would be amazed just how reckless people can be given access to rolling credit. (My day job is navigating the consequences of the above)

    It’s absurd to you as you know what you would or wouldn’t do, the lenders have to decide based on what you could do.

    Premier Icon footflaps
    Full Member

    50% of households in the UK currently borrowing money to make ends meet

    I do wonder how reliable those sorts of figures actually are. How do they know why people are borrowing?

    Premier Icon thestabiliser
    Free Member

    Good oh, not too catastrophic then. Annoying though. Hmm. Nwe’d a new plan though. Anyone got 25k they want to lend me?

    Premier Icon revs1972
    Free Member

    But then you would have a loan for the same amount as your previous CC debt and the same cards would have a zero balance ready to be maxed out the very next day. You would be amazed just how reckless people can be given access to rolling credit.

    Guilty as charged 😞
    Learnt that hard lesson and thankfully not repeated 😄

    Premier Icon Daffy
    Full Member

    A good credit rating doesn’t mean you can borrow. If you have sizeable debt, but a good score, you may be at your limit. The fact that you’re trying to consolidate and the debt would be equal is irrelevant to them.

    Premier Icon squirrelking
    Free Member

    @molgrips my father in law had the same issue with his mortgage. Santander, unsurprisingly.

    Premier Icon intheborders
    Free Member

    I was curious so signed up to see mine.

    Interesting that the maximum is 999 and yours was 975 – so that implies that a ‘good’ score doesn’t automatically mean you can get additional credit as per Daffy’s comment.

    Premier Icon thestabiliser
    Free Member

    I think I made an error in selecting what the loan was for saying home improvements when debt consolidation might have been a better box to tick but it was 50/50 split and not sure how much difference that would have made?

    Premier Icon DickBarton
    Full Member

    My bank has started doing this and my score seems to be good. I’ve also got Clearscore and had a decent score with them when they were scoring out of 700, they then changed to 1000 and my score plummeted – no other changes other than they were going from out of 700 to out of 1000.
    Aware they won’t be identical but there is quite a difference between the 2 different scores…which just shows how things get measured differently between systems.

    Premier Icon LimboJimbo
    Full Member

    I think I made an error in selecting what the loan was for saying home improvements when debt consolidation might have been a better box to tick

    Yep, that would do it. Chances are it wouldn’t have got as far as an underwriter and was auto-declined by their algorithm on affordability. Taking the information from your application, as well some assumptions about the general cost of living, they would estimate your net disposable income (NDI). Servicing outstanding debt eats into this, so letting them know the new loan is replacing on old one frees up NDI, boosting your affordability. It’s possible to miss the cut off by pounds and be declined without a human ever looking at it, especially with the big lenders.

    Try the MSE suggestion, I don’t know for sure, but would imagine their search tools take the above into account.

    Premier Icon Flaperon
    Full Member

    I do wonder how reliable those sorts of figures actually are. How do they know why people are borrowing?

    I’d guess because the companies being paid by credit card have changed from TUI and Rolex to Esso and Asda?

    Premier Icon thestabiliser
    Free Member

    Bugger! Good to know anyway

    Premier Icon jhinwxm
    Free Member

    The fact that you’re trying to consolidate and the debt would be equal is irrelevant to them.

    Well, this isn’t true at all. It absolutely does make a difference.

    Premier Icon cheddarchallenged
    Full Member

    There’s normally a right of appeal if a credit provider refuses to lend.

    I recently got turned down for a mobile contract where the credit search was performed by Vodafone. I wrote to vodafone and explained why I thought the rejection was wrong – and they subsequently overturned the decision.

    It might be worth doing this to ensure the rejection hasn’t been caused by a data issue e.g. wrong data entered / credit file has an error in it etc.

    Premier Icon argee
    Full Member

    I think it’s explained well by others, the experian score is just against your history, your actual borrowing level is also on experian with a dial somewhere which gauges how much borrowing you could potentially get, from low to high.

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