Hi,

I'm a bit confused about loan applications. Before you apply you're often told that applying for loans can affect your credit rating (i.e. the more you apply for, the worse it will be). But you don't often get a proper actual quote from the loan company until you've put the application in! For example, I could see a good rate here on a loan, see that it's obviously "subject to status" and know that the difference in interest between that advertised and the actual rate I'm offered could be huge. But I don't know this until I've applied.

How am I suppossed to shop around for the best deal when multiple loan applications are frowned upon? Can anyone spread some light in the darkness here?

R.

i also have this problem! im looking to apply for a loan but have a bad credit rating according to one company and a good one according to another . The bank have advised that every time I apply and am rejected this is marked as refused credit and is something you often have to inform other lenders. I have found that some companies will offer a quote and then ask if you wish to proceed with the application but these tend to be the "less reliable" shall we say lenders with the higher interest rates . I'm not sure if interest rates are affected by your credit rating ???? but obviously the more time you have the loan the greater the interest - the bank have told me this term and condition also features in "subject to status" people with very good credit and higher earnings can also secure reduced rate loans and credit cards again featuring in "subkect to status" have you asked the bank about their current rates ? rather than going through a lender? i am attempting to secure a loan with the bank as i think them easier to approach if something were to go wrong i.e. loss of earnings etc banks tend to be easier on clients that bank with them my friends have found than people that go through lenders have found with the companies in question.

Well, I don't think I have a bad credit rating, I have a good wage and a low mortgage (never missed any payments), but I do know that only a tiny proportion of customers are ever actually offered the headline rate. It would be nice to be able to test the water, so to speak, see what rate they're going to commit to offering me and then decide to proceed with an application after that, without penalty on my credit reference file. It seems to me that the current system prevents customers from shopping around!

I could try with my bank, yes. I'll look into it. Perhaps the loan companies don't penalise you for making one or two applications, but will if you've made 10. Who knows! The system isn't very transparent.

The headline rate has to be offered to at least 1/3 of applicants according to FSA guidelines.

Best thing to is to check your credit rating -there are various ways of doing so, I however use checkmyfile.co.uk.

Thanks catflea. I just checked with them (great site btw but £20 for all 3 is a bit much imho) and my rating is apparently 896 out of 1000. Is that good? It says it is!

Ah, a helpful note on the report says,

"Only credit application searches are seen by lenders, so that they can make an assessment of how ‘credit active’ you are. There are lots of myths about the problems caused by having several credit application searches recorded on your credit report. Certainly, many searches within an hour or two can indicate a possible fraud, and dozens in a month can indicate financial desperation, but up to about 10 searches a year is perfectly normal and is expected. Very low levels of searches can tell lenders that you are not very credit active, so they may not be so willing to lend to you."

That answers my question.

thats very good. experia show you your available credit and how much you are currently borrowing of this amount. It shows what credit is still available to you- this should also give you some idea of how much you can borrow and if your application would be approved.