Myopic financiers
Discussion
I am constantly amazed at just how short-sighted most financial institutions are. Considering they are supposed to deal in financial investment, they have no foresight at all.
My 26 year old wife has a £20k salary and a secure job with the government which she's had for 8 years, good history with her bank and so forth. She has a credit card which she uses but prefers to use that old-fashioned commodity, cash and she's had two cars previously where all the payments have been made. Because I pay all the bills etc, her outgoings are about £60 a month so she has a lot of disposable income and the repayments are about 25% of her nett wage.
No doubt because her credit score isn't high enough, a certain company has decided not to offer her the loan they repeatedly advertise ad infinitum in every mag you pick up and have passed her on to a broker who will no doubt return with a higher cost loan which we don't want because hey, I can get a cheap one anyway.
These financial institutions are the same ones that are desperate for your custom when you're older and the same ones who desperately want your mortgage at some point in the future.
So it's rather short-sighted not to consider a loan in a situation where there is absolutely no reason not to give one because in the future, when they want her custom, she's going to remember and tell them to swivel.
My 26 year old wife has a £20k salary and a secure job with the government which she's had for 8 years, good history with her bank and so forth. She has a credit card which she uses but prefers to use that old-fashioned commodity, cash and she's had two cars previously where all the payments have been made. Because I pay all the bills etc, her outgoings are about £60 a month so she has a lot of disposable income and the repayments are about 25% of her nett wage.
No doubt because her credit score isn't high enough, a certain company has decided not to offer her the loan they repeatedly advertise ad infinitum in every mag you pick up and have passed her on to a broker who will no doubt return with a higher cost loan which we don't want because hey, I can get a cheap one anyway.
These financial institutions are the same ones that are desperate for your custom when you're older and the same ones who desperately want your mortgage at some point in the future.
So it's rather short-sighted not to consider a loan in a situation where there is absolutely no reason not to give one because in the future, when they want her custom, she's going to remember and tell them to swivel.
got a simailar problem at the moment. need a loan, no one will touch for no real reason.
so, i've attacked this in a different way. i've become a rate tart with the cards. if someone wants to lend me 6k at 0% interest - i'm game. the only bit of work to do is to ensure your dd payments are made every month, and that you have a new card lined up in 6 months time.
also my halifax card has a huge limit (huge for me) and were offering cash at 6.9% for the life of the loan on the card itself.
what annoys me the most is that the loan applications have left a record on my credit rating and from what i understand - that is a negative effect. so i dont want to be doing that too many times.
so, i've attacked this in a different way. i've become a rate tart with the cards. if someone wants to lend me 6k at 0% interest - i'm game. the only bit of work to do is to ensure your dd payments are made every month, and that you have a new card lined up in 6 months time.
also my halifax card has a huge limit (huge for me) and were offering cash at 6.9% for the life of the loan on the card itself.
what annoys me the most is that the loan applications have left a record on my credit rating and from what i understand - that is a negative effect. so i dont want to be doing that too many times.
Here's an interesting snippet from one of those credit agencies. This is the sort of information they base loan decisions on and presumably insurance premiums.
OK. I live on a residential development of housing which is extremely in demand. House prices vary between £120k and £280k 2 bed link to 4 bed detached and there is no local authority housing on the estate. Residents are teachers, coppers etc. Nearly every house has two cars although it's true to say that probably nobody is stupid enough to have a Gold card and pay a monthly fee!
This is what comes back from the postcode check:
Classification:
Younger families and singles in lower quality housing
This postcode is typical of 1.37% of the UK population.
Housing Type: The most common type of housing in this area is flats. These properties are mainly council owned and the amount of moving within this area is classed as being above average.
Residents: In this area the most common social group is C2DE. The levels of qualifications held by residents is very low and of these residents a very low proportion are directors. Households predominantly consist of young families and singles and there are a very low number of students in the area.
Financial: There is an extremely low number of investors who reside in this area. The financial risk associated with this post code is extremely high. The number of Gold Card owners is very low.
Other Information: There is a very low level of car ownership in this area. The type of daily newspaper bought is typically a popular one and the typical Sunday newspaper is of popular type.
OK. I live on a residential development of housing which is extremely in demand. House prices vary between £120k and £280k 2 bed link to 4 bed detached and there is no local authority housing on the estate. Residents are teachers, coppers etc. Nearly every house has two cars although it's true to say that probably nobody is stupid enough to have a Gold card and pay a monthly fee!
This is what comes back from the postcode check:
Classification:
Younger families and singles in lower quality housing
This postcode is typical of 1.37% of the UK population.
Housing Type: The most common type of housing in this area is flats. These properties are mainly council owned and the amount of moving within this area is classed as being above average.
Residents: In this area the most common social group is C2DE. The levels of qualifications held by residents is very low and of these residents a very low proportion are directors. Households predominantly consist of young families and singles and there are a very low number of students in the area.
Financial: There is an extremely low number of investors who reside in this area. The financial risk associated with this post code is extremely high. The number of Gold Card owners is very low.
Other Information: There is a very low level of car ownership in this area. The type of daily newspaper bought is typically a popular one and the typical Sunday newspaper is of popular type.
I dislike the way these companies go about their business and how the credit applications are recorded.
For example (my example):
A married couple, late 20s, both with degrees and postgraduate education, both with professional jobs with large multinationals, reasonable size equity, no adverse credit history ever. Both earning in upper tax bracket. Relatively large disposable income.
Northern Rock advertise a loan at 5.9% - application is made, credit scoring takes place, offered loan at 7.9% with no explanation. Credit record now has a record of the application, so even if it is not taken out other lenders can see it. So further applications to other companies are negatively affected by the initial application regardless if it was completed.
My 1st point: Given my history and financial standing, who the hell is getting the 5.9% which is "typical"?
2nd point: why do credit records not have the details of applications which were not "followed through" removed - why can't you simply say "no thanks" at which point the finance co is obliged to remove the record?
For example (my example):
A married couple, late 20s, both with degrees and postgraduate education, both with professional jobs with large multinationals, reasonable size equity, no adverse credit history ever. Both earning in upper tax bracket. Relatively large disposable income.
Northern Rock advertise a loan at 5.9% - application is made, credit scoring takes place, offered loan at 7.9% with no explanation. Credit record now has a record of the application, so even if it is not taken out other lenders can see it. So further applications to other companies are negatively affected by the initial application regardless if it was completed.
My 1st point: Given my history and financial standing, who the hell is getting the 5.9% which is "typical"?
2nd point: why do credit records not have the details of applications which were not "followed through" removed - why can't you simply say "no thanks" at which point the finance co is obliged to remove the record?
tinman0 said:
got a simailar problem at the moment. need a loan, no one will touch for no real reason.
so, i've attacked this in a different way. i've become a rate tart with the cards. if someone wants to lend me 6k at 0% interest - i'm game. the only bit of work to do is to ensure your dd payments are made every month, and that you have a new card lined up in 6 months time.
.
Oh dear, this way lies "Are you in arrears with your credit card, are you struggling with all your different payments..."
mcflurry said:
I work for a bank, own my home with no major debt apart from mortgage, yet I got turned down for an interest free tv...
Going back a quarter of a century
I worked for a bank. In those days, if Joe Public wanted to buy, say, a car, the loan application was referred to head office, who wanted details of the actual car, from which they could calculate whether there would be enough residual value in the vehicle for them to repossess it if you defaulted in 18 months' time.
None of my mates had car loans, you saved up (or borrowed from parents) for that old shed. Bling was a Radiomobile radio-cassette. Nobody had credit cards except me, and then it had all of £300 limit (I was 18)**. A credit card was 'just in case'.
Now it's "Here, have sh!tloads of debt, buy what you like; and when you get bored, have some more debt".
No wonder kids are like they are.
**It was 22 years before that card got to zero balance. Two months later the bank wrote to say they were closing my account as (effectively) I didn't owe them any money
'Just in case', my arse.
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