Fairly long intro here - specific questions at the bottom.
Browsing the MotleyFool pages I saw that TheAA were offering loans with 5.8% interest (typical) which can't be bad. (Note the use of "typical").
I went through the on-line application process - all went well until the final page when I was told that there was a minor query on my application and asked to phone them.
This I did.
I was then told that they couldn't loan me the amount asked for at
5.8% BUT they'd be very happy to loan it at 6.8%!!When I queried this I was told that the 5.8% was "typical" - and indeed the small print does say "You may be offered a different rate depending on your personal circumstances, our credit assessment procedure and other related factors." She did not think the 5.8% was an advertising scam to get the potential borrowers' attention.
When I queried why I had been rejected for the 5.8% I was then told it was due to my Credit Score.
I then asked if they could put this in writing to me - I was told that they couldn't as that would be against the Data Protection Act. (Yes, I know - this isn't the case - I also asked for the details of their Data Controller - I was told they do not have one. Please don't divert thread to discussions of this and Data Protection - happy to give more details/discuss on new thread ).
I was told if I was not happy I would have to phone in office hours and speak to a supervisor.
I have since done this - the supervisor explained that they could not offer me a loan at 5.8% as my credit score was not high enough - when pushed she said they would be concerned about me having difficulty in repaying or defaulting as indicated by my credit score. However, they were more than happy to loan me at the higher rate. I explained that this would of course mean I would have to pay back more each month. In TheAA's view this means that you are less of a credit risk - if you can't find x pounds a month you can obviously find more than x pounds more easily!!
I told her I had recently applied for two new credit cards - both of which had been issued - I was not a credit risk in the eyes of the banks. She then told me that the checks carried out for my credit card applications would make my score lower.
I have seen both my credit reports and there is nothing iffy on either, I suspect that I am quite a good or even very good credit risk
- never had any trouble with credit cards, CCJs, banks, 0% interest etc etc.
I have recently applied for two new credit cards - again no problem - both issued OK.
Questions:
1) Under what circumstances could a "poor" (in their eyes) credit score mean it is OK to make a loan at a higher rate?2) Is the information which the credit reference agencies supply to an individual the same as they supply to companies doing credit checks - or is there more to the companies?
3) Am I right in saying that the credit reference agencies do NOT provide a credit score against an individual.4) Do the credit reference agencies tell companies how many credit checks have been made against an individual in the recent past?
5) Does having multiple checks made with credit reference agencies in itself cause a deterioration in any credit scoring - if so how?