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cumulus
Topic Author
Posts: 1003
Joined: Wed Aug 23, 2006 4:39 pm

Credit File.

Sun Jul 15, 2007 6:55 pm

I have always financed my cars and just ordered a new Audi A3 Quattro. It's £28,0000 and threw £10,000 in and financed the rest.

The same bank which I've used for 12 years (and financed 7 cars through and NEVER missed a payment!) declined the application on the grounds of what was on my credit file and told me to check what was there. I also bank with them so they can see my salary. I have my mortgage with them also and have a faultless history!

Checked ith Equifax online and the only default I have is where I missed a months payment on my mobile phone bill 8 YEARS AGO!! And I still have the same mobile account!!

I owe, ex mortgage, £2100 on VISA and that's it!!

I got there in the end with the bank, but why are they "beholden" to a credit file??

Opinions / Ideas?
What Goes Up Must Come Down, Hopefully In One Piece!
 
andz
Posts: 7771
Joined: Mon Feb 16, 2004 7:49 pm

RE: Credit File.

Sun Jul 15, 2007 6:59 pm

This country is neck deep in credit debt and a new credit act was introduced a month or so ago to put the brakes on. Now you cannot get anything on credit without an exhaustive investigation, they look at everything. Right now only 1 in 3 vehicle finance applications is being approved.
After Monday and Tuesday even the calendar says WTF...
 
BCAL
Posts: 2925
Joined: Mon Jun 28, 2004 10:16 pm

RE: Credit File.

Sun Jul 15, 2007 7:26 pm

Well Cumulus if you watch the sketches on Little Britain with the bank clerk whose decisions are always made by the computer, you might have your answer. Unfortunately this funny sketch is a reflection on the way of life today. You can have a good income, a good credit report, be on first-named terms with your bank manager, have credit limits of + GBP 15,000 on your credit cards and even have a Black Amex, but miss one payment on an utility bill and the information will be on your credit file for at least 7 years for all to see.

Not that long ago I had a similar experience to you, being declined a loan for no apparent reason. I checked my credit file and found that I had a dispute with a mail order firm that I had never used. I asked this firm for all details of all purchases etc and we found out that someone had been using my name and a slight variation in my address to buy goods and not pay for them. It was sorted out but it hammered the message home, always check your credit files as you could be the innocent victim of identity fraud etc.

Personally I think with all this technology in place today, people and firms want to take advantage of it. This is why good common sense and decisions of humans have been eroded by the computer's decisions.
MOL on SRB's latest attack at BA: "It's like a little Chihuahua barking at a dying Labrador. Nobody cares."
 
raffik
Posts: 1564
Joined: Tue Feb 28, 2006 9:50 am

RE: Credit File.

Mon Jul 16, 2007 7:40 am

I work for a mortgage company and am familiar with underwriting secured loans and mortgages.

The days when it was down to manager's decretion in a bank or building society have long gone, primarily because it's such a risky way of lending. Many banks in the 80s loaned recklessley and a system was required that lowered this loss margin.

Banks such as Lloyds TSB have introduced external credit checking to companies such as Equifax and Experian.
Depending on your borrowing product, it will require a credit score above a certain number in order to be able to take this out. After checking your payment history PLUS all the different credit cards and credit you have available to you, this will result in a score. So a loan for £18,000 would require a score of atleast 500, if your score does not reach this, then an automated message will come back to Lloyds to say Declined.

Many banks do not actually employ people to underwrite lending applications any more- it's costly and time consuming. So much easier to outsource to agencies.

Also, holding too many credit cards (even if you don't have balances) is bad! Everyone has a quota as to how much credit you can hold and when you reach this you will get declined for anything!

Cancel old accounts you don't use.
- Alec
 
National757
Posts: 487
Joined: Mon Jul 16, 2007 3:05 am

RE: Credit File.

Mon Jul 16, 2007 11:37 am

Quoting Raffik (Reply 3):

Also, holding too many credit cards (even if you don't have balances) is bad!

What's a good amount of debt to hold in relation to your credit limit? Like 5% of the limit or so? Ideally I would love to have zero balances on all my CC accounts but looks like that can do more harm than good.
 
usflyer msp
Posts: 4026
Joined: Tue May 23, 2000 11:50 am

RE: Credit File.

Mon Jul 16, 2007 11:44 am

Quoting National757 (Reply 4):
What's a good amount of debt to hold in relation to your credit limit? Like 5% of the limit or so? Ideally I would love to have zero balances on all my CC accounts but looks like that can do more harm than good.

Generally, 1-9 % of your credit limit.
 
Slovacek747
Posts: 634
Joined: Fri Jan 06, 2006 7:10 pm

RE: Credit File.

Mon Jul 16, 2007 12:09 pm

Sorry but the general rule is to not use more than 30% of your available credit. Beyond that it can start to ding your score a few points.

Slovacek747
 
cumulus
Topic Author
Posts: 1003
Joined: Wed Aug 23, 2006 4:39 pm

RE: Credit File.

Mon Jul 16, 2007 6:45 pm

As I said, I owe £2100 with available facilities (unsecured) of £68,000. I have found out that what works against me is what I have available. The solution, aparently, is to remove some of these facilities.

It's pathetic, behave yourself and you can't get credit and misbehave and you also can't get credit.
What Goes Up Must Come Down, Hopefully In One Piece!
 
raffik
Posts: 1564
Joined: Tue Feb 28, 2006 9:50 am

RE: Credit File.

Mon Jul 16, 2007 8:22 pm

Quoting Cumulus (Reply 7):
It's pathetic, behave yourself and you can't get credit and misbehave and you also can't get credit.

It's got nothing to do with misbehaving. It's to stop people from getting into too much debt. You don't need £68,000 of credit, so why have so many credit accounts? Close some that you don't use. It's just the way it is I'm afraid.
You can't keep on taking credit cards out all the time because in a few months time, you could have access to hundreds of thousands of pounds worth of credit, start maxing them out and then do a runner.
- Alec
 
BigOrange
Posts: 2297
Joined: Tue Apr 13, 2004 2:20 am

RE: Credit File.

Tue Jul 17, 2007 3:25 am

Quoting Raffik (Reply 3):
Also, holding too many credit cards (even if you don't have balances) is bad! Everyone has a quota as to how much credit you can hold and when you reach this you will get declined for anything!

Cancel old accounts you don't use.

Compare that to the good ol' USA where the less credit you have the lower the credit score, and canceling an old account also lowers your credit.
 
Slovacek747
Posts: 634
Joined: Fri Jan 06, 2006 7:10 pm

RE: Credit File.

Tue Jul 17, 2007 5:10 am

Canceling old cards hurts because it means that a bigger percentage of your available credit is being used and also because credit length is also factored into your score, so if you cancel one you opened in college, it will make it appear as if you have had credit for a shorter period of time. BigOrange isn't correct in saying it will automatically hurt your credit score. It can help or hurt depending on the situation you are in.

Slovacek747
 
raffik
Posts: 1564
Joined: Tue Feb 28, 2006 9:50 am

RE: Credit File.

Tue Jul 17, 2007 6:48 am

I don't know how it works in the US, but length of account opening doesn't factor into credit scoring in the UK.
The scorefile will show the account opening date, the payment history, credit limit and current balance.

I am not saying people should have no credit cards, but an EXCESSIVE amount is detremental to your score.

Anyways, back to living
- Alec
 
aviationwiz
Posts: 882
Joined: Thu Apr 01, 2004 7:20 pm

RE: Credit File.

Wed Jul 18, 2007 3:21 pm

Length of account does factor into credit scoring here. When I got my recent credit report from my American Express Clear card, it said the 2 things lowering my score was the low credit limit I have on my one card, and that the account had been open for less than three years.
Proudly from the Home of the Red Tail.
 
raffik
Posts: 1564
Joined: Tue Feb 28, 2006 9:50 am

RE: Credit File.

Wed Jul 18, 2007 8:58 pm

Strange how things differ accross the pond!
In the UK, we only go as far back as 12 months for checking payment histories on credit accounts.
Any more than that is surplus.

Banks don't tend to keep individual scores of customers any more as I said in an earlier post, all credit scores and decisions is made by an outsourced company, so how long you've banked with your bank and whether you have your mortgage,loans, credit cards, savings with them will not count.

How you've mantained your combined credit in general will affect your score.

If you apply for a loan or overdraft, a bank worker will log into a back office programme from Equifax or Experian (whoever has the contract for that bank) and they will input the applicants' details- employment, personal data, outgoings.
In a few moments, the programme will connect with the Agency's server and provide the bank with a score.

Each product the bank offers will have a required score attached. So a loan for £5000 will carry a score of 300 or above. If your score comes back at 299, for whatever reason (you've got too much debt, you have too little credit history etc) then you are declined. You might be eligible for a loan at a lower rate which carries a lower score requirement.

It's a very complex thing and different lenders have different requirements. Different credit agencies carry different information...
- Alec
 
cumulus
Topic Author
Posts: 1003
Joined: Wed Aug 23, 2006 4:39 pm

RE: Credit File.

Thu Jul 19, 2007 3:50 am

Quoting Raffik (Reply 13):
In the UK, we only go as far back as 12 months for checking payment histories on credit accounts.
Any more than that is surplus.

Mine goes back six years.........
What Goes Up Must Come Down, Hopefully In One Piece!
 
VC10BOAC
Posts: 387
Joined: Wed Feb 04, 2004 2:11 am

RE: Credit File.

Thu Jul 19, 2007 4:00 am

Quoting Raffik (Reply 13):
Each product the bank offers will have a required score attached. So a loan for £5000 will carry a score of 300 or above. If your score comes back at 299, for whatever reason (you've got too much debt, you have too little credit history etc) then you are declined. You might be eligible for a loan at a lower rate which carries a lower score requirement.

Is the scoring system different in the UK from that in the USA? Because in the USA a score of 300 qualifies you as a major deadbeat. You cannot get much under 600 and the best credit offers go to 760+
 
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ManuCH
Posts: 2679
Joined: Mon Jun 20, 2005 12:33 am

RE: Credit File.

Thu Jul 19, 2007 4:11 am

This scoring system is incredible... there's nothing similar in Switzerland: more precisely, yes, there are private companies maintaining individual records, but you get negative score only if you don't pay your utility/phone/mortgage/rent bills very often (or get to the point of having to go to court because you don't pay). Having too many credit cards or things like that just don't count - I guess it would be illegal for some reason.

Cumulus, you could try getting your loan in Switzerland. The only things they really look at is your income and how much rent/mortgage you pay.
Never trust a statistic you didn't fake yourself
 
National757
Posts: 487
Joined: Mon Jul 16, 2007 3:05 am

RE: Credit File.

Thu Jul 19, 2007 4:33 am

Quoting ManuCH (Reply 16):
but you get negative score only if you don't pay your utility/phone/mortgage/rent bills very often (or get to the point of having to go to court because you don't pay)

See that's the way it should be. It's unbelievable how complicated the credit system is in the United States and in Britain apparently as Cumulus details his experiences.
 
AirframeAS
Posts: 9865
Joined: Thu Feb 05, 2004 3:56 pm

RE: Credit File.

Fri Jul 20, 2007 8:09 am

The best place to get a TRUELY free credit report is at http://www.annualcreditreport.com I think thats for U.S. customers only.
A Safe Flight Begins With Quality Maintenance On The Ground.
 
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asuflyer05
Posts: 2123
Joined: Wed Feb 25, 2004 8:53 am

RE: Credit File.

Fri Jul 20, 2007 9:56 am

Quoting Raffik (Reply 13):
In the UK, we only go as far back as 12 months for checking payment histories on credit accounts.
Any more than that is surplus.

We go back 7 years in the states which I feel is too long on credit accounts. Though IMHO 12 months is too short.

Quoting Raffik (Reply 13):
Banks don't tend to keep individual scores of customers any more as I said in an earlier post, all credit scores and decisions is made by an outsourced company, so how long you've banked with your bank and whether you have your mortgage,loans, credit cards, savings with them will not count.

It's the opposite here. I know Chase has their own scoring system here. It was a pain trying to get them to buy an auto loan because the customer would have a 540 Transunion and their internal score would indicate a 480 making the custoemr untouchable.
 
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seb146
Posts: 23387
Joined: Wed Dec 01, 1999 7:19 am

RE: Credit File.

Fri Jul 20, 2007 11:48 am

Quoting Asuflyer05 (Reply 19):
We go back 7 years in the states which I feel is too long on credit accounts. Though IMHO 12 months is too short.

I just got a notice from a collection agency about a credit card debt I supposedly had in 1994. They say the last payment I made was in 1996. I honestly thought I had paid the thing off and so I now have that to deal with. I am a bit concerned and do not want to send my personal information to them since I don't know who they are. Besides, I was living at my last address for over 2 years and heard nothing from them. All of a sudden, I get a notice at my new address. Seems a littel shady to me....

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cumulus
Topic Author
Posts: 1003
Joined: Wed Aug 23, 2006 4:39 pm

RE: Credit File.

Sat Jul 21, 2007 1:12 am

Quoting Seb146 (Reply 20):
All of a sudden, I get a notice at my new address. Seems a littel shady to me....

Certainly here, when you move and apply for new credit it show as a search and your new address and will show on your file. They will have found it from that.
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