Experian / Equifax

A question about : Experian / Equifax

Hi,

I recently applied online for a loan, via Santander, as my Equifax Credit Score was pretty much maximum score (i.e. I am an EXCELLENT borrower) but, for whatever reason, I was refused the loan. Personally, I know I am in great shape financially, I have a well paid job, I am a home owner, no CCJ's, etc... so a little confused.

The refusal email was instant so something I entered during my application they didn't like (or they have lightning speed access to my credit files). They said I would receive a letter detailing why!!!

The email also said they use Experian, something I haven't used in years, so I decided to re-subscribe and take a look. My account looked as it was 5 years ago, when I last signed in... i.e. my current address and recent previous addresses weren't listed. My Credit Score was in the Yellow (=FAIR). I updated all my information, the next day I was in the green (=GOOD). Surely this can't be right?

The letter from Santander, 3 days later, really didn't give me ANY information about why I refused the loan... it was very generic and non-specific. Disappointing. They did say they had their own Credit Scoring System but, again, wouldn't go into detail... it really is annoying and baffles me as I know I earn a decent salary and can more than afford the repayments (which is substantially less after I consolidate my other loans, the reason for the loan (+ some home improvements, which I wasn't able to select also on the application)).

I am starting to believe that the whole credit score system is seriously flawed and lenders aren't in the slightest thorough.

I also think that we should be entitled to know why we were refused in order to, at least, remedy any potential administration problems.

I am reluctant to try another provider just yet in case there is an error somewhere, which could be fixed, as this will add another check to my history.

What are your thoughts?

Yours,
Peter

Best answers:

• Credit scores mean nothing.
  The real factors are:
  What is your annual salary?
  Are you on the electoral roll?
  What is your debt to credit ratio?
  Any financial associates on your credit files?
  Any late payments/defaults?
• No lender has to offer you a loan, maybe you didn't fulfill the criteria for Santander.
  Your excellent score is a prime example the score means nothing.
• Hi thanks,
  That's what I'm starting to believe and starting to feel the Ј15 a month, each, for Equifax and Experian is pointless.
  Quote:
• Why are you paying Ј15 per month when a credit report will only ever cost you Ј2 each?
  You haven't answered any of my questions and if you have a card with a limit of Ј250 that suggests you have a sub prime credit card which sounds like you are being economical with the truth and your "excellent" rating is as good as you think it is.
• I had the same experience also with Santander, I've been in the same county council job for 11 years and been at current address for 9 years . I've had loans with my bank in the past and settled them .
  I to have looked at Experian and Equifax and after looking nothing screams out to me .it shows all my settle loans over the past years back to 2005 .
  So am also a little bit puzzled as to why I got refused for a loan also .
• I pay Ј15 so I can check at anytime... on a daily basis if need be. I am going to cancel these very soon, once I know where I stand and happy it's all looking good and up-to-date.
• I used to work for the old Abbey National. The credit score acceptance for loans was a closely guarded secret but we knew it changed on a daily basis. It also depended on day of month and whether targets were being met. After Xmas was a bad time to go for a loan as understandably demand was high and as the limits reached the credit score tightened - applying end of month was bad time as well as thats months allocated pot may have been reached and they were only accepting the creme de la creme of applicants.
• Thanks for the responses.
  As you don't want to disclose your salary, a general rule of thumb is lenders won't lend you more than half of your annual salary.
  So let's say you earn Ј30k and have Ј12k total available credit limit and Ј8.4k debt. (70% debt to credit ratio). If you wanted to take out a loan of say Ј9k to clear the debt, you would need to be earning circa Ј42k plus.
  Other factors which might have affected you - as you are on the electoral roll this is good, however most lenders prefer 3 years+ to show stability.
  As your debt to credit ratio is quite high, this also works against you as a lender might view it as you are too close to your limits already.
• The problem is with taking out a loan to clear your existing debt is quite simple, and as I explained in my rough formula above.
  Using the example of figures I gave, the problem lenders have is they have no way of knowing whether you would pay off your cards and close down the accounts, or just clear the cards and run them up again, so if that happened you would end up owing Ј17.4k, as opposed to just Ј8.4k and more likely to default on your repayments. Hence why ideally you need a low-ish debt to credit ratio and if you are wanting to borrow a large amount to clear your debts, you would need the high salary to cover it plus the existing debt (see formula).
  As an aside, if you have a high salary, why are you not throwing more money towards clearing off your debts to negate the need for a loan? If your reliance on credit is high, you might want to visit the DFW board and post up a statement of affairs for people to guide you into where you could cut back in order to pay off your debts quicker.
• Cancelled both Experian and Equifax... ahhh