Why Applicants With Good Credit Are Declined For Finance
Tuesday, 12. October 2010
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I have issued another general warning about the lack of money available to lend and the subsequent repercussions. I have had many people writing to me explaining that they had strong credit but have been declined for loans on several occasions and are now being told that they have dropped into the sub-prime category, which means they will pay high rates of interest if they are able to secure finance at all. The reason for this is the fact that whilst there are still lenders willing to offer low rates that seduce borrowers, whether that is APR or lease rate, they are being even more selective, so even customers that have a pretty good credit score cannot quite get to the level required. After having several searches carried out on them they slip even further down the pecking order as their credit score drops still further. And yet, has these customers followed my advice in my free book they could have saved themselves a great deal of grief and secured a loan on very competitive rates. To add to the pain there were rumours spreading last week that a funder had made a mistake in a rate that he had promoted but rather than withdraw it, and in order to save face, he decided instead to reduce the number of deals accepted to just 1 in 8. This is a disgrace and certainly doesn’t help customers. We also heard that Fortis Lease, that had already withdrawn from the broker market, has now withdrawn totally. Yet another sad step that will reduce the amount of competition and available money to lend. By Graham Hill
