Credit Rating - is it possible to be too good?

SarahMollie

So, I've just had a bit of an unfortunate experience with DFS. They've called me to tell me that the sofas I ordered under their 0% offer last week won't be happening as I've not been approved for credit. The only reason I wanted to take this on credit was that I've just bought a house and am getting some work done, so thought this could be a nice easy way to spread some of my costs.

Now to say I nearly fell off my chair is an understatement. this is because I've never not paid back anything I've owed so I can't see how my credit score could be anything less than perfect.

Few finer points.
1. Full time job - permanent. Annual income about €70k
2. No dependents
3. Credit card - paid in full every month by direct debit.
4. Mortgage in my own name only
5. Bill phone - bill paid every month in full by direct debit.

Is is possible the fact that I've never had a car loan or personal loan is working against me? I find it impossible to believe that a bank can approve me for a mortgage of hundreds of thousands of euro, yet I can't get approved for a sofa.

Am i missing something? From what I can tell I should be viewed as the most likely person to pay back a loan. I've always paid everything on time and in full - is my only fault not owing enough?

(And yes, I've just paid the €6 to the ICB for my credit report - will take up to 5 working days )

L1011

DFS almost certainly don't use the ICB but use the private agencies instead. These are far more error prone

New mortgage may be enough for s refusal, though

ssmith6287

I'd imagine DFS use a seperate finance company who would use ICB. They should provide you with a way of finding out why you didn't get approved. I know I dont have a great job but Ive had a lot of loans which were paid off early, got a mortgage and got my recent ICB report and it's spotless. Is the company you are working for doing well, how long have you lived in your address? things that may not directly effect your credit rating can effect finance decisions

SarahMollie

ssmith6287 wrote: »

I'd imagine DFS use a seperate finance company who would use ICB. They should provide you with a way of finding out why you didn't get approved. I know I dont have a great job but Ive had a lot of loans which were paid off early, got a mortgage and got my recent ICB report and it's spotless. Is the company you are working for doing well, how long have you lived in your address? things that may not directly effect your credit rating can effect finance decisions

Hi,

Yes I asked for the details of that, and they use a company called Creation who are UK based. I called them and they basically wouldnt tell me anything bar repeating robotically "you didnt meet our internal credit standards" but they wouldn't tell me why. I did manage to ascertain that they use the ICB for Irish customers which is why I've requested the report.

Regarding the other issues, I work for a major multinational who are extremely stable. I've been with them for about 18months and am permanent and full time. Before that I was with a competitor of my current employer for over 4 years, again permanent and full time. There was no break in my employment.

I've been in my current rented apartment over 1 year and have just bought a place of my own which I plan to move into next month (hence needing a sofa!) All of the utilities at this address are in my name and are all always paid in full and on time by direct debit.

I'm really at a loss as to what has gone wrong. I can only thing that its because I generally tend to save for what I want instead of borrowing, that I'm being penalized.

Menas

Do you have a common name OP?
Perhaps someone with the same name as you has been running up debts and living beyond their means and the 'system' cannot differentiate between ye?

drunkmonkey

SarahMollie wrote: »

I've been in my current rented apartment over 1 year

I'd bet that's it. You should have bumped that up by a few years, also places can have bad reputations, lets say 2 of your neighbours defaulted on something else it might bring the whole apartment block down.

Cork Lass

I may be wrong here but I think that your credit rating is higher/better if you're making regular monthly payments to the likes of a credit union etc. I know someone once told me that because, like you, I pay off my credit card in full each month, don't have a car loan etc that my credit rating would actually be low.

newacc2015

Cork Lass wrote: »

I may be wrong here but I think that your credit rating is higher/better if you're making regular monthly payments to the likes of a credit union etc. I know someone once told me that because, like you, I pay off my credit card in full each month, don't have a car loan etc that my credit rating would actually be low.

ICD use FICO and another rating AFAIK. This is how FICO is calculated in the US. I imagine its pretty similar for Ireland.
http://www.myfico.com/crediteducation/whatsinyourscore.aspx

FICO likes a mix of credit. But its not a huge element. I cant imagine someone who use buys a sofa on 0% interest and 0% down would need to have a perfect FICO to get it.

OP there might be a mistake on your credit rating

ssmith6287

drunkmonkey wrote: »

I'd bet that's it. You should have bumped that up by a few years, also places can have bad reputations, lets say 2 of your neighbours defaulted on something else it might bring the whole apartment block down.

Ditto...

Alot of places look for 2 to 3 years at a current address. If you have a mortgage drawn down with the bank it will show on your icb report an intention to change address. If you were to miss payments they couldn't track you down

Suzyq

I had the same experience with DFS - good salary, low mortgage, clean ICB report and was refused. It was pretty baffling to be honest with you.

When the guys arrived to deliver the sofa, they mentioned that a very high percentage of their deliveries were to cash on delivery clients with many customers having been refused credit after purchasing their sofa.

Melendez

This post has been deleted.

SarahMollie

ssmith6287 wrote: »

Ditto...

Alot of places look for 2 to 3 years at a current address. If you have a mortgage drawn down with the bank it will show on your icb report an intention to change address. If you were to miss payments they couldn't track you down

I'm not sure I get this. I gave them my new address (as its where the sofa should be delivered to) and since I'm now the registered owner of the property, I would think I'm now much easier to track down than a person in rented accommodation.

SarahMollie

Suzyq wrote: »

I had the same experience with DFS - good salary, low mortgage, clean ICB report and was refused. It was pretty baffling to be honest with you.

When the guys arrived to deliver the sofa, they mentioned that a very high percentage of their deliveries were to cash on delivery clients with many customers having been refused credit after purchasing their sofa.

Thats really interesting - sharp practice on behalf of DFS as they should really be more transparent in their lending criteria rather than simply trading on the promise of 0% credit when in actual fact, many customers don't end up getting it.

SarahMollie

newacc2015 wrote: »

ICD use FICO and another rating AFAIK. This is how FICO is calculated in the US. I imagine its pretty similar for Ireland.
http://www.myfico.com/crediteducation/whatsinyourscore.aspx

FICO likes a mix of credit. But its not a huge element. I cant imagine someone who use buys a sofa on 0% interest and 0% down would need to have a perfect FICO to get it.

OP there might be a mistake on your credit rating

Just to point out, they did ask me for a deposit of 10% which I paid, so the credit was just for the remainder of the purchase.

coylemj

SarahMollie wrote: »

Just to point out, they did ask me for a deposit of 10% which I paid, so the credit was just for the remainder of the purchase.

And if credit is refused as it clearly was in your case, do they undertake to refund the deposit if you can't raise a loan elsewhere or get your hands on the cash to complete the deal?

I wouldn't have paid a deposit until the credit was approved, otherwise why hand over your money and be held hostage? Why pay a deposit at all on a frigging sofa?

SarahMollie

I wouldn't have paid a deposit until the credit was approved, otherwise why hand over your money and be held hostage? Why pay a deposit at all on a frigging sofa?[/QUOTE]

It honestly never crossed my mind that credit would be refused so I didnt mind the deposit at the time, obviously I now feel differently.

I was honestly too busy telling the salesman how little I thought of him yesterday when I got the phonecall to enquire about the deposit.

I'm still deciding if I should just pay for the sofas (as they're a bit central to the design I've chosen for everything else in the room) or ask for my deposit back. I don't want to cut off my nose to spite my face.

If I do decide on a refund, I'll be screaming from the rooftops if they give me any trouble about returning the deposit.

Suzyq

Upon being told that I had been refused credit, the next words out of their mouth was 'so you will be paying cash on delivery, yes?' There was no mention of the fact that I might not be able to proceed on the basis that the credit was no longer available. I had also put down a circa 10% deposit and like Sarah, I was convinced that credit wouldn't be a problem.

In the end, I decided to pay for the sofa as it was badly needed and I was very happy with it however I would be reluctant to deal with them in the future as I feel that the 0% credit offer simply doesn't exist.

SarahMollie

Suzyq wrote: »

Upon being told that I had been refused credit, the next words out of their mouth was 'so you will be paying cash on delivery, yes?' There was no mention of the fact that I might not be able to proceed on the basis that the credit was no longer available. I had also put down a circa 10% deposit and like Sarah, I was convinced that credit wouldn't be a problem.

In the end, I decided to pay for the sofa as it was badly needed and I was very happy with it however I would be reluctant to deal with them in the future as I feel that the 0% credit offer simply doesn't exist.

This is exactly my experience! I definitely wouldn't deal with them again and would advise others not to go near them - but short term, I kinda need the sofa!

ssmith6287

SarahMollie wrote: »

I'm not sure I get this. I gave them my new address (as its where the sofa should be delivered to) and since I'm now the registered owner of the property, I would think I'm now much easier to track down than a person in rented accommodation.

If you gave your new address you would have had no time living there, equally as risky.

coylemj

It sounds like a variation on what the Americans call 'bait and switch'. This crowd are clearly enticing you with the availability of cheap credit which they convince you will be a formality, then they pressure you to pay a deposit, then the credit is refused.

At this stage, the reason why you paid a deposit comes into focus - was it because the salesman said it was the last one in stock so you panicked and paid up? Or perhaps it was at a priced at a discount that was expiring that very day?

coylemj

ssmith6287 wrote: »

If you gave your new address you would have had no time living there, equally as risky.

From a credit (lending risk) perspective, living in a house you own for a week is surely infinitely better than living in a rented flat for 3 years?

dudara

coylemj wrote: »

From a credit (lending risk) perspective, living in a house you own for a week is surely infinitely better than living in a rented flat for 3 years?

A lot of private credit agencies go by length of time at address. So the fact that you've only owned the house a very short time, plus lived at your current address for a year, is a potential reason why they refused you. I've also heard informally that these checks can include patterns in your neighbourhood and whether or not you're on the register of voters.

pawrick

Sounds more likely that it's a bait and switch. The criteria for approval is probably set artificially high to avoid giving credit in as many cases as possible leaving people committed to the purchase after paying the deposit and thus unlikely not to pay up or get a loan elsewhere.

tommy5678

hi would a 20 year old with a full time job get a mortgage

L1011

tommy5678 wrote: »

hi would a 20 year old with a full time job get a mortgage

Depends on how long they have the job and how much they've saved themselves for the deposit. Generally no, but its not impossible.

slimjimmc

Mod: Any queries regarding mortgages should be posted in the Banking & Insurance & Pensions forum.

delahuntv

They've done you a favour.

Dfs are overpriced rubbish, avoid at all costs.

I'll suggest Finline furniture - made in Emo co. Laois and showrooms on longmile road.

Real furniture that will last. - And decent priced too (no false half price "sales")

Toots

drunkmonkey wrote: »

I'd bet that's it. You should have bumped that up by a few years, also places can have bad reputations, lets say 2 of your neighbours defaulted on something else it might bring the whole apartment block down.

I agree. Creation AFAIK work on credit Scoring, as opposed to Credit Rating, so you'll get X points for having full time job, X points for living in Ireland for over 5 years, X points for owning a property, etc then at the end when all the points are added up, if you have enough then you'll get approved. The rented accommodation, being there for only one year, and the fact that you'll be moving house will all count against you in this, whereas for the likes of a bank loan it wouldn't matter a bit.

Crazyteacher

delahuntv wrote: »

They've done you a favour.

Dfs are overpriced rubbish, avoid at all costs.

I'll suggest Finline furniture - made in Emo co. Laois and showrooms on longmile road.

Real furniture that will last. - And decent priced too (no false half price "sales")

So glad someone else said this. I'm so disappointed with a sofa I got a year ago. Poor quality all round. And I also had the same run around about buying it on credit. In fact they went out of their way to get me to buy it that way when I was willing to pay in full. Then of course it didn't get accepted. Then I was put through to their store in Dublin because they wanted paid on delivery. Rudest sales person I've ever spoken to. Avoid at all costs.

keithclancy

SarahMollie wrote: »

Few finer points.
1. Full time job - permanent. Annual income about €70k
2. No dependents
3. Credit card - paid in full every month by direct debit.
4. Mortgage in my own name only
5. Bill phone - bill paid every month in full by direct debit.

The cynic in me would think, why would a company offers someone 0% credit where they make their money on penalties and late fees to someone that pays all of their bills on time.

AFAIK to apply for the credit you have to put down a 10% Deposit. I'd get my money back and go else where just out of principal, besides they have a sale around 50 weeks of the year anyway.

If they refused I'd bring them to small claims court, application for credit shouldn't be on the basis of paying/loss of funds.

SarahMollie

Just by means of an update, I got my credit report information through in the post from the ICB and as expected, its perfect.

My only conclusion is that this is epitomy of Bait&Switch, so my advice to future prospective DFS customers would be to assume that the 0% credit doesn't actually exist!