Conflicting credit scores and turned down for loan

[merchantbanker]

Does anyone have any advice please? I was turned down for a large loan in April by sainsburys. I had applied for £19,000 to consolidate debt.

I have approx that to pay off various things (house moving, divorce etc etc) and want a more manageable monthly payment. I'm currently paying a minimum £200/month on one card, £100/month on another, £100 on another and trying to clear the smallest one/ highest interest at about £400/month. This isn't sustainable for me.

I earn a decent wage at £60,000 but have high expenditure too (high rent etc)

Anyway, I got turned down and am scared of applying elsewhere as I don't want to ruin my credit rating.

I have looked on Noddle and they say I have a '3/5' score of 573 which seems middling/not good but on Experian it's 999 (excellent). The experian score is one I can access via my barclaycard account, but I don't have access to the full report

Where should I go from here? Grateful for any advice, thank you.

I should say I also pay into a good pension and don't want to stop that. It's about £500 a month of my pre tax income.

I would struggle to cut my living costs beyond what they are, and would like to save some cash per month

Hence wanting a lower interest loan

Thank you

Did they turn it down because its debt consolidation? My bank did that to me years ago too. They see it as a bad risk.

They didn't say, Fluffy, and said that they couldn't say why.

I would speak to the bank. It could be that they are uncomfortable with the amount of credit you have open to you.

Do you pay the cc with standing orders or they're suggested DD?

There's no good answer really. You have to find a way of paying down the debt without borrowing more money. At the moment the risk is spread across your credit card providers and a bank won't want to take all of that risk on themselves. Not these days anyway.

Money saving expert website has a great section on getting out of debt. Check it out.

Thanks both.

I pay a few on their minimum, such as the one on £200, and I pay more on the others. Maybe I could pay the minimum on all but one and throw money at one at a time to get them totally paid off?

If I got the loan I would pay off them all and close most down, keeping one to use occasionally and pay off in full regularly.

I'll have a look on MSE, thanks

I think there's a calculator on mse which works out how best to pay off the various cards. I think the general rule is highest interest first and minimum on everything else.

That's what I was thinking.

Don't pay by DD though, cancel them and set up a standing order for minimum plus £10. The debt clears much faster.

Then put everything onto the highest interest one. When that's paid off tackle the next one. It's called snowballing.

I had to do this and I was £25-30k in with less income. If I'd been as frugal as I am now it wouldn't have taken me as long

Debt consolidation is always risky to lenders. It shows you can't manage the debt you already have. Especially if you plan to keep one of those lines of debt open. It may be the only option to snowball your debt. It clears quickly when you do that.

Why does it matter if they are direct debits fluffy?

The DD goes down a bit each month, as it does the amount being repayed goes down but not the debt.

It's their way of spinning the debt out for as long as possible.

With a standing order you can set it at one fixed amount so the actual debt gets paid off quickly.

Ah I see what you mean - thanks

Credit scores don't really mean anything as each lender uses their own criteria and score card.

You could sign up to checkmyfile, they do multi agency credit scores which is really useful. And their customer service is second to none, they really helped me when I needed some advice.

You will have been declined due to the amount of credit you already have. A lender cannot guarantee that you will not take that £19k and blow it. They assess you based on whether you can afford your current commitments plus the new loan, and you couldn't.
Look at your cards. The one with the highest interest rate, pay as much off that one first and minimum on the others. If you have credit cards with available credit, some will offer you a balance transfer deal. Ring and ask. I once asked Barclaycard for a rate reduction and they dropped my APR by 3%. Don't ask don't get and all that.