Unable to get finance from bank without reason😣

[Danielle2500]

I really hit a brick wall with my bank…

They offer car financing via their app, however, when I try to do it, it says I’m unable to do that.
Spoke to them on the phone, they said there must be something bad on my credit file to not be approved for this (I then checked and I’m not even approved for credit cards with them…)

I have a high credit score on Clearscore, there is nothing bad on there.

The bank advised they get their reports from Equifax so might be worth checking that - so I signed up with them, got my report, no red flags whatsoever. I have even spoken to them and they said they couldn’t see any reason on my file for me to be declined.

I printed my report, went into my local branch and asked them to look into it for me, because there is nothing wrong with my credit file and so I don’t understand why I am not eligible for financing with them.
They only said they don’t know, their system just rejects me straight away.
I asked what I can do to rectify this, if there was anything I can do at my end and I was told they can’t advise on that :(

So basically despite of having a clear credit file, my own bank is unable to offer me any financing and they can’t/don’t give me any reason as to why.

Any thoughts/ideas? Has someone been in a similar situation?

Lemonswan
ul-21 08:14:40

Banks are there to make money. I am convinced they do this on purpose.

    Yerrrrs.   I can't think what other purpose they might have?

If they come back with nothing I will just change banks - I want a reason as to why I am not eligible for anything or I’m going elsewhere where A) I won’t have the same problem B) they can advise exactly what the problem is and how to rectify it

I get that it's frustrating OP but that's a pretty unrealistic expectation. Of course you are free to move your account to any other provider for any reason you wish, but what if you face the same problem? Length of finance relationships plays a part in your credit history, so it could also be detrimental to move your main bank account.

Gone are the days when you could walk in to your regular bank, chat with the manager and have them approve a loan for you. Everything may be perfect on your credit file, but you might not meet the internal requirements for a loan at that time. Perhaps the bank has reached an internal threshold for lending that month, or they are targeting a specific demographic. At the end of the day you have no right to credit from any provider, they pick and choose who they will offer it to.

Why don't you just go on MoneySavingExpert and use one of the loan finder tools, this only performs a soft credit search, but it can give an indication on your expected success.

Remember if a bank loans to 95% of applicants then some people still have to fall in to the unsuccessful 5%.

@ConfessionsOfAChocoholic - I agree.

I think you are taking this too personally, if your credit file is clean, then you have no issues.

As mentioned, they may not like your demographic (income, age, income to debt ratio, savings balances, occupation etc)

The bank does not need to provide you with a reason, and to expect it is un reasonable.

'Unfortunately, after much deliberation, i have reviewed your application, and unfortunately you do not meet our current lending criteria'

If you had spent the time questioning their decision, on getting a new loan, you would have had the money by now.

This is not meant to sound harsh, I just think you need a real life perspective of your requests.

Your credit file might be clean however there are much more they check and not just your credit score.
Sometimes it might be a case that you didn’t meet the affordability criteria. Banks are big on that of recent because lots of people are complaining about them lending irresponsibly. After your bills are paid, they have a certain amount you need to have left over as a percentage of the total amount you want to lend (not just your monthly instalment) before they can accept you.

Do you have a financial connection with anyone like maybe a joint account, if you’re linked to the person and they have poor rating, it might be visible to the bank.
Also, you might say you want to get to the bottom of this however the banks are not under any obligation to disclose the reason to you otherwise you can tailor your next application to match the criteria to get accepted.

I understand they are under no obligation to lend.
Is it really unreasonable to expect a reason for it? I guess I was just put off by their ‘it’s a blank no’ approach rather than giving me possible reasons (like you guys did so kindly here).

In any ways, I will be pursuing the car finance elsewhere, and in the meantime asked for an investigation to be opened at their end, just in case something comes up and I can be put back on their ‘people worth lending to’ list :)

@Danielle2500 - yes it is unreasonable. They process thousands of applciations a week, some pass, some fail. They have no obligation to inform those unsuccessful why they were so.

It is unreasonable to expect them to.

@fromdownwest - ok, I understand, thank you.
(Technically I haven’t made an application though as I am not even able to :D)

Me and my partner had exactly the same problem recently but for a credit card. We opened an investigation with our bank and it turned out it was because we're both self employed, which is ludicrous. Both have great credit, good payment history, 5+ years proven increases in earnings etc. out!

If you're on Clearscore then go through their recommendations section, it gives you a percentage of how likely you are to be accepted. I've just opened a new credit card for a balance transfer and I was preapproved for the one I went for, which was also a really good offer

@BananaHammock23 I am also self employed so that might be it then! I will definitely query it and see what they say, thanks.

@lanbro thanks, yes I’m already looking elsewhere and there certainly are some decent deals out there to be had :)

I think self employment + covid just bring up massive red flags, which obviously isn't fair at all! My industry wasn't affected and I never claimed any of the covid grants etc, but haven't been able to get any credit since the start of the pandemic. Good luck!

Banks make the most profit from people who aren't very good with their debt. It's all very counter intuitive.

They profit from customers who have lots of debts that they take out over a long time and make minimal payments towards. The odd extra charge for late/non payments also boosts their profits!

As long as a potential customer looks like they will keep making their interest payments and eventual full repayment most lenders are happy. But as a caveat to this most lenders like a mix of customers so they can balance their risks between high profit risky customers and low profit more reliable ones. So people can get rejected just because that particular lender has reached their quota of your profile.