Where do I start as there are so many lenders. And so many exceptions to so many rules.
Most lenders are very secretive about their lending decisions
Obviously if you have CCJ, IVA etc you wont get credit
The Credit Matrix and automated check
- A basic Experian and Equifax report. The lender establishes if you are who you say who you are.
Hence it is important to be found. To be on the electoral register.
To have no gaps in your address history
Being found is step 1
- Automated search and point scoring system
You score points for cirtain things
Holding a credit card
Having a landline telephone number
Then comes the automated CAIS search
Your outstanding loans and whether or not they were paid on time is measured
Lenders move this automation to suit themselves
Thus is you have a few bounced credit card bills you will AUTOMATICALLY be declined
The number of missed payments literally can be mooved up or down to suit the lender. If they need to do business or not
Recently with the lenders cash shortage this have been set by many lenders to zero missed payments
Thus point 2 is PUT ALL BILLS ON DIRECT DEBIT, especially the minimum payment on the credit card
If you are overcommitted
- Manual Search
Generally the first thing looked at is the land registry
Does the customer own a house
Do they have equity
Occasionally a customer pretends to be a homeowner. All lenders check the land registry.
There is also a theory that if you have ever exercised your "rule of halfs" which is when you return a vehicle to a finance company
They will never accept you on credit again
- Ability to pay
Some payments in borderline cases ask for bank statements to proove they can pay
- The switch
Some lenders will offer you a different term if they think you are weaker. More deposit or as of late a shorter term
The banks operate a sepate credit scoring system for branch based loans
Even if you are late with credit card bills etc as long as your account is good standing you may well be able to get a loan, but the interest rates are usually double or even triple. There are no balloons. They might be for a smaller amount than you hoped for.