Discussion
My girlfriend recently applied for a loan for a new car and she was declined. She has only ever had bit of credit in her life and that was taken out in December last year a credit card with a limit of £4000. She has £267 on that and has never missed a payment. Bar that she has never had any credit, she has no bad marks on her record and has had 2 addresses in 10 years. Her credit score is 927 out of 999 so I suggested trying a lease, spoke to a nice guy who said he will try for a lease with a company who only checks the credit score so thought that would be perfect.
He has today come back and its been declined again?
Any ideas?
Also be aware if you search for car insurance they do a credit check on you, so if you use Confused.com watch out..
He has today come back and its been declined again?
Any ideas?
Also be aware if you search for car insurance they do a credit check on you, so if you use Confused.com watch out..
m3sye said:
My girlfriend recently applied for a loan for a new car and she was declined. She has only ever had bit of credit in her life and that was taken out in December last year a credit card with a limit of £4000. She has £267 on that and has never missed a payment. Bar that she has never had any credit, she has no bad marks on her record and has had 2 addresses in 10 years. Her credit score is 927 out of 999 so I suggested trying a lease, spoke to a nice guy who said he will try for a lease with a company who only checks the credit score so thought that would be perfect.
He has today come back and its been declined again?
Any ideas?
Also be aware if you search for car insurance they do a credit check on you, so if you use Confused.com watch out..
Well if she has a £267 debt she can't pay off and is happy to leave on 20%+ interest rates then perhaps she should think twice before taking out a far more substantial loan and blowing lots of it on depreciation & VAT.He has today come back and its been declined again?
Any ideas?
Also be aware if you search for car insurance they do a credit check on you, so if you use Confused.com watch out..
(Or does she pay it off fully every month and just happen to have a £267 debt today?? That's fine!)
Others on here know far better than I but why not try to get credit from whoever her current account is held with - they will have better knowledge of her financial situation.
Does she have a job?
Other committed outgoings: rent, council tax etc...?
blindswelledrat said:
walm said:
[Well if she has a £267 debt she can't pay off and is happy to leave on 20%+ interest rates then perhaps she should think twice before taking out a far more substantial loan and blowing lots of it on depreciation & VAT.
..?
Are you for real?..?
Perhaps you are right to call me out. I essentially have two axes to grind: 1. leasing - it's a rip-off. 2. Buying new cars - it's a rip off.
So I will do everything in my keyboard power to put people off doing either.
That said - why would you keep a £267 debt on a credit card if you had the means to pay it off? Perhaps I am just being thick.
walm said:
[.
That said - why would you keep a £267 debt on a credit card if you had the means to pay it off? Perhaps I am just being thick.
I dont disagree with the other stuff.That said - why would you keep a £267 debt on a credit card if you had the means to pay it off? Perhaps I am just being thick.
But 247 is such a tiny sum of money to have on a credit card that It wouldnt make the slightest bet of difference. So not thick, your logic is fine, just OTT about and amount of money that is totally irrelevant.
blindswelledrat said:
walm said:
[.
That said - why would you keep a £267 debt on a credit card if you had the means to pay it off? Perhaps I am just being thick.
I dont disagree with the other stuff.That said - why would you keep a £267 debt on a credit card if you had the means to pay it off? Perhaps I am just being thick.
But 247 is such a tiny sum of money to have on a credit card that It wouldnt make the slightest bet of difference. So not thick, your logic is fine, just OTT about and amount of money that is totally irrelevant.
blindswelledrat said:
walm said:
[.
That said - why would you keep a £267 debt on a credit card if you had the means to pay it off? Perhaps I am just being thick.
I dont disagree with the other stuff.That said - why would you keep a £267 debt on a credit card if you had the means to pay it off? Perhaps I am just being thick.
But 247 is such a tiny sum of money to have on a credit card that It wouldnt make the slightest bet of difference. So not thick, your logic is fine, just OTT about and amount of money that is totally irrelevant.
The car to lease is £315.00 to buy would cost £28k you would lose more buying it and selling it in 3 years than you would leasing it so why would you look at buying it?
Regarding the £258 that is irrelavant if she wanted to pay it off she could but she was actually advised not too to help her credit rating. People say its best to put come on then pay it off but its acutually best to put some on and pay most of it off but not all. If you pay it all off the credit company earns nothing from you and they can see that.
The £268 is a I bought this month for the holiday too, which by the way to make you feel better will be paid off bar £15, this month by me
Regarding the £258 that is irrelavant if she wanted to pay it off she could but she was actually advised not too to help her credit rating. People say its best to put come on then pay it off but its acutually best to put some on and pay most of it off but not all. If you pay it all off the credit company earns nothing from you and they can see that.
The £268 is a I bought this month for the holiday too, which by the way to make you feel better will be paid off bar £15, this month by me
Surely the guy dealing with the application must be able to give your girlfriend an idea why? I deal with lending pretty much daily and I can't think of a case where I wouldn't have been able to give my client a clue as to why it was a not going to be agreed. I don't deal with car finance and have no experience of leasing so there may be different criteria but I'd assume the principle is the same.
bigandclever said:
m3sye said:
Also be aware if you search for car insurance they do a credit check on you, so if you use Confused.com watch out..
No, they don't. They do a search or an 'unrecorded enquiry', the footprint of which has no bearing on any subsequent credit checks.The only credit score that actually matters is the score that the prospective lender gives you. The Experian, Equifax, whoever jobs can only ever be indicative in a very broad sense.
What won't be helping is a credit record of less than 12 months and (I presume) a relatively short electoral roll record. The problem is that there isn't enough of a credit profile for a lender to make a decent assessment on, and in the current financial climate lenders are very twitchy - any doubt and it's 'decline'. But what definitely really won't be helping is the (now) 2 declined loans.
What won't be helping is a credit record of less than 12 months and (I presume) a relatively short electoral roll record. The problem is that there isn't enough of a credit profile for a lender to make a decent assessment on, and in the current financial climate lenders are very twitchy - any doubt and it's 'decline'. But what definitely really won't be helping is the (now) 2 declined loans.
Edited by bigandclever on Sunday 13th September 21:40
m3sye said:
Regarding the £258 that is irrelavant if she wanted to pay it off she could but she was actually advised not too to help her credit rating. People say its best to put come on then pay it off but its acutually best to put some on and pay most of it off but not all. If you pay it all off the credit company earns nothing from you and they can see that
Rubbish, you should clear the card every month to improve credit rating. Leaving a 'small' amount makes them think you can't afford to pay it!Seems strange why it's declined despite having a 900+ score on Experian.
As others have said, the length of time on the electoral roll and relative lack of debt payment history might not be enough information for lenders to assess the risk.
Affordability, salary and outgoings may also factor.
Banks are not in a very giving mood at the moment, you're more likely to be able to get a loan e.g. from a bank which you have established a relationship with for a while and have your salary paid into the same account.
It would be difficult for any lender to lend out without any form of banking relationship. Don't take this as absolute gospel - this can help but every lender has a different lending criteria.
As others have said, the length of time on the electoral roll and relative lack of debt payment history might not be enough information for lenders to assess the risk.
Affordability, salary and outgoings may also factor.
Banks are not in a very giving mood at the moment, you're more likely to be able to get a loan e.g. from a bank which you have established a relationship with for a while and have your salary paid into the same account.
It would be difficult for any lender to lend out without any form of banking relationship. Don't take this as absolute gospel - this can help but every lender has a different lending criteria.
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