Declined car finance but can't understand why (BMWFS)

[Tonyc32]

So apparently the same thing has happened to quite a few people who try to use BMW FS.....

I applied for a BMW M5 on Contract Hire via one of the dealerships. I was declined by BMW FS and with the dealer we appealed to the Chief Underwriter with supporting information and was still declined. They only ever sent me the boilerplate rejection letter claiming I was too high risk and that I should check Noddle, Experian and Equifax (which I did, in great detail!).

At first I thought it was because I had only been in my current job for a few months but the dealer fed back the information that they were not questioning my ability to afford the lease or even payback the lease but there was something major in my credit history that stopped them lending and they felt that no other lender would lend to me either (?!). Even with calls to Experian I can't find anything and nor could they.

I applied for an AMEX card after all this and it went through fine.....so not as if any lender is turning me down.

The Good:

- Highest Noddle rating (5/5), 512 Equifax Score (highest band), Experian rated as good.
- No late payments, no CCJ's, credit history of many years with no drama
- On the Electoral Register
- Provided proof that I owned a home outright, without a mortgage
- I provided to them proof of work contract, proof of significant savings and that those savings had been there for a long time (not placed there to fool anyone), proof of share holdings, etc.
- Provided proof of other car leases happily concluded (Australia - I had a period of working over there)
- We tried lots of things such as payment of the whole lease term up front (£18k!), and even a cash bond as security. Still no.
- Last credit search over a year ago

The Bad:

- Had only been in current job for a few months (they said wasn't the issue)
- Had a period of low credit utilisation while working abroad. I only intermittently used my credit cards while over there but all were still on file.

I understand that credit checks agencies are just one side of it. BMWFS have their own criteria when it comes to lending but I just can't think of a reason why i'd get a solid no....

Does anyone have any insight? Something I have not thought of?

[jdearden]

Equifax rating of 512 isn't very good.
800 and above is classed as being good
I use a system called check my file. Gives u complete history, using the 3 main credit reference agencies.
It will also show u what's good about you and what are your bad points.

[P-Jay]

Could be something simple like a poor input of data by the dealer / BMWFS.

Something darker like a fraud marker which won't show on a consumer report (I think) I have seen these occasionally when people live aboard for a time, but retain a UK correspondence address - I.E. having all your bank statements sent to a UK address but telling the credit card co your Aus address so you get the bills on time etc, can cause a problem.

Could be something completely out of your control, finance underwriting sometimes can be a bit like insurance underwriting, you can be hurt by the actions of people who match some criteria or other of yours.

Ever VT'd anything?

But to be honest, you'll never get an answer out of them as to why, the responses will always be boiler plate, in all the years I worked in finance no one ever explained why we were to be so secretive about rejections, we were just told to NEVER say why. Given the details you've mentioned above you should be able to get the deal via a broker or another finance co without much fuss, in fact you've probably already had a PM or two...

[audidoody]

I wonder if the Australia sojourn has anything to do with it. Getting cars on credit has more serious implications for the seller than credit card payment record. They are handing over a circa £70,000 asset and want to be sure it's not going straight on to a container ship.

[Tonyc32]

jdearden said:

Equifax rating of 512 isn't very good.
800 and above is classed as being good
I use a system called check my file. Gives u complete history, using the 3 main credit reference agencies.
It will also show u what's good about you and what are your bad points.

Hi - you are thinking of Experian. My Experian score is 950.

With Equifax 512 is in the top band - Excellent.

[Tonyc32]

audidoody said:

I wonder if the Australia sojourn has anything to do with it. Getting cars on credit has more serious implications for the seller than credit card payment record. They are handing over a circa £70,000 asset and want to be sure it's not going straight on to a container ship.

Possibly, but they had no idea about this until I sent them the docs.

Australia wouldn't show up on my credit file. The only thing in my credit docs would have been a period where my UK CC utilisation dropped

[Tonyc32]

P-Jay said:

Could be something simple like a poor input of data by the dealer / BMWFS.

Something darker like a fraud marker which won't show on a consumer report (I think) I have seen these occasionally when people live aboard for a time, but retain a UK correspondence address - I.E. having all your bank statements sent to a UK address but telling the credit card co your Aus address so you get the bills on time etc, can cause a problem.

Could be something completely out of your control, finance underwriting sometimes can be a bit like insurance underwriting, you can be hurt by the actions of people who match some criteria or other of yours.

Ever VT'd anything?

But to be honest, you'll never get an answer out of them as to why, the responses will always be boiler plate, in all the years I worked in finance no one ever explained why we were to be so secretive about rejections, we were just told to NEVER say why. Given the details you've mentioned above you should be able to get the deal via a broker or another finance co without much fuss, in fact you've probably already had a PM or two...

Good info, thanks. I always kept anything Australia and UK separate - I used Australia credit cards over there.

What does VT'd mean?

[P-Jay]

Tonyc32 said:

Good info, thanks. I always kept anything Australia and UK separate - I used Australia credit cards over there.

What does VT'd mean?

I think this is where your problem may lie, your Australian Credit File will be linked to your UK File in some way or other, you can run into real trouble if you're telling credit agencies you lived at X, Y & Z address in the UK when you were in Aus because you didn't move 'on paper' or you had your mail going to your parents address etc etc - it's a minefield, some people think that they're keeping things simple, but if an underwriter thinks you may be trying to hide 'another life' aboard they're going to slam the door on you.

It doesn't matter if you did it for the most honest reasons, if you lived in one address and claimed to live in another, even if it was just for the sake of not having bank statements sent half the way around the world you're technically committing fraud and you can end up with a fraud marker on your file and it's a nightmare to remove.

Personally I'd speak to a good FA who knows about these things.

VT or voluntary termination, with certain finance agreements, HP mainly, the asset is jointly held by both the finance company and the customer, so their are certain rules - namely the point of ownership moves from finance co to customer once half of the total amount payable (deposit, repayments, balloon etc) is paid - this means 2 things, firstly the finance co can no longer repo the asset should default occur and the customer can return the asset in exchange for the remainder of the repayments - basically once you've paid half you can give it back no-harm-no-foul. This has become more popular in recent years because basically to secure the business the finance co wrote silly agreements (small deposits, big balloons) when the asset could be worth far less than the outstanding balance for a lot of the agreement - customer gets bored of the car half way through, owes 10k, it's worth 6k so gives it back - Finance Co auctions it, gets 5K and takes a massive hit. The agreement on the credit history is shown as "Settled by VT" or the like.

Now, it is illegal for a finance co to turn down finance to anyone solely because of a VT as it's a completely legal and proper way to settle an outstanding debt, however they almost always result in a loss for the finance co for that deal - thousands risked and a loss made.

Finance Co's have the right to refuse anyone credit, and don't have to give a reason, I know of many times when finance has been denied to someone who has VT'd in the past, but no one would ever record that as the reason though.

[Tonyc32]

P-Jay said:

Tonyc32 said:

Good info, thanks. I always kept anything Australia and UK separate - I used Australia credit cards over there.

What does VT'd mean?

I think this is where your problem may lie, your Australian Credit File will be linked to your UK File in some way or other, you can run into real trouble if you're telling credit agencies you lived at X, Y & Z address in the UK when you were in Aus because you didn't move 'on paper' or you had your mail going to your parents address etc etc - it's a minefield, some people think that they're keeping things simple, but if an underwriter thinks you may be trying to hide 'another life' aboard they're going to slam the door on you.

It doesn't matter if you did it for the most honest reasons, if you lived in one address and claimed to live in another, even if it was just for the sake of not having bank statements sent half the way around the world you're technically committing fraud and you can end up with a fraud marker on your file and it's a nightmare to remove.

Thanks for the info, I just don't see how they can be linked - there was nothing to link the two in different countries besides name...and you can imagine the difficulties a 'John Smith' would have!

Assume my time in Australia was a holiday where everything as in my companies name and nothing was on me! It would be like going on holiday for a while and directing all your bill to your hotel.

[P-Jay]

Tonyc32 said:

Thanks for the info, I just don't see how they can be linked - there was nothing to link the two in different countries besides name...and you can imagine the difficulties a 'John Smith' would have!

Assume my time in Australia was a holiday where everything as in my companies name and nothing was on me! It would be like going on holiday for a while and directing all your bill to your hotel.

Really depends on how long you were there, weather your work there was paid in Oz or the UK if you were registered at an address there.

Your biggest issue will be your Australian credit cards, I assume you didn't walk into National Bank with nothing more than your passport and ask for a CC? They would have ran a credit check, they cross borders with ease, this would have caused a link.

I hope I'm wrong, but consider - good to great 'score', faultless record, good terms and deposit, passed affordability test, but it's a firm 'No' by all means try another lender, but based on the information above I'd guess there's a fraud marker on your file - it's certainly worth checking out, but it probably won't show on a consumer report.

[Tonyc32]

P-Jay said:

I'd guess there's a fraud marker on your file - it's certainly worth checking out, but it probably won't show on a consumer report.

Do you know a way to get a non-consumer report?

[rfoster]

Tony - I write about 80 deals a month with BMWFS (we're a broker for them, amongst others). The credit score that Experian / Equifax etc throw out has little clout with the finance companies - there could be numerous reasons why they don't want to do the deal, including your employment type. Their credit search facility is very extensive and will link to bank accounts / previous addresses etc.

If you have printed off a full Experian / Equifax report, I'd be happy to cast my eye over it for you and see if there's anything there that they may have picked up on - pm me if you wish. May not help to overturn their decision but it may give you some peace of mind.
Cheers, Richard

[P-Jay]

Tonyc32 said:

Do you know a way to get a non-consumer report?

Sorry I'm a bit rusty, there is a standard letter you can send along with £2 (I think) to have your data released via the DPA, that might contain it - frankly the Credit Expert type reports are st.

[Sarnie]

This just sounds like you've failed the internal BMW credit score to me purely down to a lack of credit activity, rather than any actual adverse credit history. No credit history gets lumped into the same category as adverse credit history as they have no way of verifying prior account conduct.

[Tonyc32]

Sarnie said:

This just sounds like you've failed the internal BMW credit score to me purely down to a lack of credit activity, rather than any actual adverse credit history. No credit history gets lumped into the same category as adverse credit history as they have no way of verifying prior account conduct.

yeah, I thought this may be it but I would describe my credit use as low over the last year, not dormant.

One card is £1500 spend over the last year, two large transactions
Another is used just about ever month, probably about £3k over the year, various sizes and the same the year before
Then I had one card that had zero use.

So although I was away my cards had regular use.

[blank]

Was it a particularly good deal?

Might just be that they ran out of allocated cars.


I remember my dad having this with a phone contract. He failed the credit check (he will definitely have a very good rating) and the next day all the contract deals had changed. Application for a 'new' deal went straight through.

[Sarnie]

Tonyc32 said:

yeah, I thought this may be it but I would describe my credit use as low over the last year, not dormant.

One card is £1500 spend over the last year, two large transactions
Another is used just about ever month, probably about £3k over the year, various sizes and the same the year before
Then I had one card that had zero use.

So although I was away my cards had regular use.

Two transactions over a year isn't a lot irrespective of value.

Do you clear the cards in full every month?

[Tonyc32]

Sarnie said:

Two transactions over a year isn't a lot irrespective of value.

Do you clear the cards in full every month?

Yes but the other card was many transactions, every month had many.

I clear them every month. No late payments for anything, ever!

[jdearden]

Tonyc32 said:

Hi - you are thinking of Experian. My Experian score is 950.

With Equifax 512 is in the top band - Excellent.

Your completely right. I will get my coat. Brain obviously wasn't working yesterday.