Refused Credit

[evoscott]

with all this problem with the credit crunch and companies not lending.!!!!has there been anyone refused credit for there car .if so what would be the outcome as to your deposit . AS far as i was concerned i was told there would be no problem with finannce when i placed my order . but there again we are in the middle of a recceision .

[stealth]

Gorden Clown is trotting all over the world at the moment telling everyone to spend and lend to buy our way out of the recesion ,so in the worst case senario I'm sure the wonky eyed droopy jawed pratt will lend you the money himself at 0% intrest .

[Mel HKS]

Thats quite funny actually as I was thinking the same thing. People that think they might have good credit (due to past applications for credit), might still think they will be okay for finance now.

I was shocked in February as I applied for an interest free transfer credit card (i do this occasionally) and I was turned down for the first time in my life. Turns out when I shut an account months ago there was actually a silly balance of say £30. The direct debits were cancelled and hey presto a missed payment (1 missed payment in my whole credit history). This was the reason!
I have a reasonable business, a good amount of equity in property etc etc. Scary stuff!!

However with finance they are more personal and should see the whole scope of you in financial terms. YOU HOPE!!!!!

[R35Bren]

Car finance is slightly different so I am told by my dealer as the finance is secured against the vehicle and not the individual, as far as hire purchase goes. Therefore it does not show on your credit report.

I would imagine that in the light of the current financial situation, with an 'fairly good' credit rating and a substantial deposit there wont be a problem being accepted for finance. Proof of income will play a factor, so it may be beneficial to have your accountant provide everything you need or have all your recent bank statements to hand when it comes to the crunch . . if you're self employed.

If you are putting down a deposit that is close or more than the vehicle will be worth at the end of the finance term then even with a sub par credit file I cant see why they wouldn't snap someone up.

I would imagine that some dealers/lenders may take advantage of our situation and anything that they can use as leverage to apply the highest APR possible will be exercised unfortunately.

I'm hoping that when it comes to July this thread doesn't have too many pages!

[charles charlie]

Any credit agreement shows on your credit report, including car loans. It matters not whether the loan is secured or otherwise.

The lender will always use your credit score as a basis for a decision on your credit worthiness and as such the APR and terms of the loan, including any provisos or conditions.

There is a misconception about credit scores too. Lenders will use it to decide whether they will make money off you. If you regularly pay off your credit cards' balance you can actually harm your credit score as you wont make the loan companies any money. Some lenders will even refuse you credit just on the basis of where you live or what job you have. In these credit sparse times, lenders have less to lend and as such will restrict who they lend to.

It's also worth using Experian etc to check your credit score and they do provide tips on how to improve it.

[evoscott]

is it true the less credit cards you have . the better chance of credit . as i have about 5 and when i got my credit report it states to improve your score close unused cards

[charles charlie]

Originally Posted by evoscott

is it true the less credit cards you have . the better chance of credit . as i have about 5 and when i got my credit report it states to improve your score close unused cards

In a way yes, as your total credit exposure compared to your income/credit rating will affect the decision of a lender whether to give you more credit.

Also the % of credit being used affects the decisions too.

A simple example is if your earnings are £30k but your total open credit is £20k (even if you only owe £2k on those cards/loans), you are less likely to get a loan as any lender will see you as over exposed (even if you only have 2K owing, its the potential that can matter more, as you could quickly spend up to that limit).

Credit scoring and loan decisions are relatively easy to predict as long as you have the info on how to manipulate them.

In these times of screwed up credit markets, it pays dividends to know your credit score and work to improve it as loans are hard to come by.

[evoscott]

thats it all my cards are getting cancceled as i dont use them anyway;-)

[Benji27]

There is always a risk.
Especially since the bankers will probably check my business accounts (the car will be registered as a company car) and say "Mmmh, your revenues have been lower than last year". I'll make sure to have the bank's financial statement with me at the time to be able to answer "True, but that's nothing compared to your business failure. And mine did not require a governement bailout".

Well, anyway, I'll pay 50% cash for the car, so lending the remaining 50% should be quite a low risk since they are assured to get the money back if they seize the car and sell it to cover the debts (worst case scenario).

[Hope4Sun]

Just a word or warning also, don't cancel any cards that you have had less than a year and ideally 18 months, this can also harm your credit rating believe it or not (i worked and developed a lot of finiancial systems for the company that pretty much supplies all the banks, building societies ,etc there finical data and was involved with a lot of work with the FSA setup and companies like Equifax and Experian), and as far as i am aware this has not changed.

After visiting one of the big lenders mortage centers a good few years back now, i listened to to guys argue most of the day if an applicatant could borrow quater of a million or not, so i think it's all done on the toss of a coin or throw of the dice anyway lol

[Wildrover]

Originally Posted by stealth

Gorden Clown is trotting all over the world at the moment telling everyone to spend and lend to buy our way out of the recesion ,so in the worst case senario I'm sure the wonky eyed droopy jawed pratt will lend you the money himself at 0% intrest .

Mate - for once I TOTALLY agree with your assessment of the situation and the description of Gordon Clown (like it). Go d I loathe this man - why is he still in office

Sorry guys - good advice on Credit Cards - maybe worth a Freebie look at Experian too.

[kornmonkey]

Originally Posted by stealth

Gorden Clown is trotting all over the world at the moment telling everyone to spend and lend to buy our way out of the recesion ,so in the worst case senario I'm sure the wonky eyed droopy jawed pratt will lend you the money himself at 0% intrest .

If he said that we should all cut back on spending, it would serve only to highlight the way his government is spending money as if they are all going to be out of jobs this summer.