Loans?

[Louise07]

Hi,
I have applied for a loan with Northern Rock and Nationwide but they both turn me and my partner down. I have a loan at the moment which I am wanting to consolidate and I can definately afford the repayments as the new loan would be considerably lower than what I pay at the moment and have been paying with no problem. I couldnt see that it would be my credit check that influenced their decision, but I have obtained a copy of this and it is fine so it is obviously not this. Northern Rock said we dont meet their criteria but cannot discose why. I cant understand what is wrong as we are both 27, have a good regular income, no bad debts, everything is above board! Does anyone know why we may have been refused and can anyone recommend where we may be able to try (with low interest rate). The only thing I can think of is that because they are offering a very good interest rate, is that they are very selective in who they lend to. Thanks in advance.

[Oneeyedvic]

Its a combination of a couple of things - one is that they feel you are 'over committed' . They have no way of knowing if this loan will go to pay off your other loans / cards or if this is an additional loan. Due to all the adverse publicity that banks get, they are very selective, and they probably were concerned that you could not afford the repayments IN ADDITION to the other payments on your credit file.

The other possible reason is that as you say, they are being very selective and you just miss out on their criteria.

Generally, what a lender is looking for is: Homeowner, living at same premises for over 3 years (and on voters role), clear searches (ie no ccjs, arrears) and up to date payments for the last 18 months.

Don't forget, that if you have applied for a loan in joint names, you need to have got two separate credit reports (your partner may have a slightly worse credit rating than you)

[Oneeyedvic]

And just thought - since interest rates have just gone up, they may be being very selective on who they lend to .

They are waiting until they can increase their rates (advertising etc) - when they will be less selective.

[jennifer_cro]

In answer to the second part of your question, Direct Line are very good and my credit rating doesn't sound as good as yours. They also offer competitive rates.

[birdwoman]

I read on one of the credit report websites that your postcode can make a difference - if there are a significant number of people in your area who default on payments then you are branded with the same brush and are considered to be a risk. Sorry I can't remember which website I read it on. But as mentioned previously it could be a number of factors that affect this decision. My husband has been turned down by Tescos twice for their credit card and we cannot fathom out why... you can appeal if you wish but it is still down to the lending policy of the company.

[scoobydooby]

Hi Louise. I was turned down by Northern Rock several years ago and, like you, had a very good credit rating. Although we'd owned our own property for many years, we'd only been in our current house for 6 months. That was the only explanation I could think of (they won't tell you why themselves). To be honest, it frightened the life out of me, I though "Oh no! That's it, they've marked my credit record and I'll never get anything again." However, I rang my bank instead and all was fine. Several years on, and somewhat wiser, I wouldn't borrow from my bank anymore. Go on the moneysupermarket website and have a look at the companies offering 5.8 and 5.9 (usually through web applications). I know lots of people who have borrowed with Lombard and they're very good. Some people will tell you to stay clear of companies who front load their interest as any early redemption will result in you having to pay most of the interest but if you compare the cheaper loan with high street banks higher rate, I think you'll find it's swings and roundabouts. Don't worry, if you're a good risk, others will fall over themselves to lend to you. Good Luck

[EverClean]

Please try to separate the terms "Credit Record" and "Credit Score" as a lender will consider things in addition t your record to assess your ability to repay a loan. These may be how long you've lived at your current address, how long you've worked at your present job, whether you are on the elctoral roll (at the correct address and ONLY one address), etc. This may not be the case in your application but they look at much more than a credit record. Plus they often "rate to risk" and will only look at certain applicants for their headline rate - like platinum credit cards that want people that earn over a certain income.