Getting a Loan in London

Teasey

Just wondering if any of you long-time Londoners have managed to get credit here and, if so, how long did you have to wait?

My boyfriend and I have been living here almost exactly 2 years. Both in our early 30's, full time employed - me in the same position since I moved and himself in the current job 7 months and the last one for the rest of the time. Same London address since July 2010. Combined earnings of just over £60k pa and both have checked out our respective Experian Credit thingy and we're both in the green/good category. However, we've applied for a joint personal loan of £10k and have been refused

The Credit Rating thing her baffles me - has anyone had any sucess with the whole process? I'd be grateful for any experiences, positive or negative!

Louche Lad

Can't offer any useful experience (I did once get a personal loan, but that was about 10-12 years ago when they were desperate to lend money).

However, just from reading news articles I have the impression that it's got very difficult to get loans, and possibly the fact that you've only got two years of UK history is what counts against you. Also, I have read that if you get refused a loan, it reduces your credit rating (I don't know how true that is, though).

Another forum to seek advice is http://forums.moneysavingexpert.com/forumdisplay.php?f=12

Teasey

Thanks

Yes my boyfreind checked his Experian thing this morning and his rating has dropped by 50 pints because of the refusal :eek:

It all seems very complicated. And seamingly you still might be refused if you're a "good risk" as you might not be the type of customer the bank wants. If you pay everything off on time then they don't make enough money off you... The joys of banking!

Ah well, I'll keep up the research....

ballsymchugh

was listening on newstalk earlier and some fella texted in saying that an elderly relative who saved and saved was refused a credit card recently because she had no history of paying back a loan.
it's completely bizarre!

Fysh

Credit ratings are bizarre - amongst other things, making several big purchases on credit at the same time can have a substantial negative effect on it, as can paying off your credit card too quickly. The negative impact on your credit rating is merely due to the perceived badness of being refused a loan, even when it's possible you were only refused the loan because you're not seen as a particularly profitable borrower.

As far as I can tell these things are worked out using an algorithm that values bad money management (and therefore propensity to pay interest) more than it values the ability of an individual to honour their financial obligations in a timely fashion. Which of course nobody admits because now we're all in austerity mode and it couldn't possibly be that banks & financial institutions mostly want to lend to people who can only just about afford to pay back their loans over the longest possible period :rolleyes:

Have you spoken to an agent for whoever refused you the loan, to discuss why you were turned down and/or get advice on what you might do to improve your chances after requesting a loan in future

Teasey

Fysh wrote: »

Have you spoken to an agent for whoever refused you the loan, to discuss why you were turned down and/or get advice on what you might do to improve your chances after requesting a loan in future

We have and apparently it's because we can only give a UK address for the past 2 years (3 seems to be the magic number) and we've no proven history of paying back a loan-the fact that this is because we've managed our money well and never needed one doesn't seem to count.

He actually suggested I take out one of those horrendous Payday Loans to "improve my credit rating" though how taking a loan for a nominal amount that I dont need at 1000% + interest is a good idea is beyond me....

Jack B. Badd

Credit ratings aren't about risk, they're about profit. If you manage your money well, you're probably low risk but you're also low profit so why would they lend to you? I can see the sense in taking out a payday loan if you want to increase your credit rating. Check out http://www.moneysavingexpert.com/loans/credit-rating-credit-score/ for info on credit ratings.

Procrastastudy

They would also normally be looking for at least 3 years address history and are very keen for people to be on the electoral register thingy (if that's possible in your case?)

ChRoMe

GCDLawstudent wrote: »

They would also normally be looking for at least 3 years address history and are very keen for people to be on the electoral register thingy (if that's possible in your case?)

This a huge thing, once we broke 3 years in the UK passing credit checks became very easy.

ceadaoin.

I got a 10k loan after being in the UK for about a year. This was in 2009, maybe it's changed since then. Or maybe it was my history of bad money management

Procrastastudy

I'm sure there are ways almost anyone can get a loan - some of them wouldn't be recommended.