Loan refusal.. any ideas why??

Kersh

My gf gets her wages put into her bank every 2 weeks. It has been this way for a few years now.
She went in enquiring about a loan of 5k. After a few days I told her to ring them and see what the story was. They told her she was refused on the grounds that they dont know what she spends her money on!!
They said there is no evidence of standing orders etc in her account.
Surely thats a ridiculous reason, as all her wages goes in there.
Like, its only for 5k. Is it normal for a bank to demand other activity in an account, surely its none of thir business.
In any case she is switching to my bank, so its their loss now.
She has not got any bad credit history/problems with bills or anything like that.

Sponge Bob

I strongly suspect that this was not AIB or Bank of Ireland but one of the recently taken over/new entrants to the market type laddies.

It would possibly have been a reasonable refusal had her income been under 20k a year but that should have been on affordability grounds or if she ran a constant overdraft or both .

Having no affordability problems and being constantly solvent I think she should complain to the IFSRA about this. If the loan is recorded as refused on her credit record because of an undisclosed and possibly illegal internal scoring system in that bank it would be a serious matter and their regulator should be called in to deal with it . IFSRA can be the new Comreg at times so HOUND them if they start shilly shallying.

She should also complain to the data protection people because she was refused by some mysterious computer which scored her on undisclosed and arbritary criteria . This computer database is unlikely to be explicity registered and thats illegal.

HTH

ircoha

Sponge Bob wrote:

I strongly suspect that this was not AIB or Bank of Ireland but one of the recently taken over/new entrants to the market type laddies.

It would possibly have been a reasonable refusal had her income been under 20k a year but that should have been on affordability grounds or if she ran a constant overdraft or both .the OP is silent on these points

Having no affordability problems and being constantly solvent I think she should complain to the IFSRA about this.Two points here: 1: we dont anything about her being constantly solvent, 2: on what basis would the girl write to the IFRSA. Banks have the right to turn down loan applications. I accept that the wording of the reasoning may seem a bit naff, but the way I see it, the money goes in, we know SFA about how long it stays there, it may all go out via the atm and at the end of the 2 weeks there is zip in the account, therefore no evidence of repayment capacity. If the loan is recorded as refused on her credit record credit record where?because of an undisclosed and possibly illegal internal scoring system You are raising false hopes here based on what? Please clarify what u mean by what I have bolded. in that bank it would be a serious matter and their regulator should be called in to deal with it . IFSRA can be the new Comreg at times so HOUND them if they start shilly shallying.

She should also complain to the data protection people because she was refused by some mysterious computer which scored her on undisclosed and arbritary criteria . heavy stuff here BobThis computer database is unlikely to be explicity registered and thats illegal.even heavier

HTH

I am not being pro bank here, I am trying to be fair.

I believe it is wrong to raise false hopes based on insufficient information.

Moving banks may not help either as they will ask for previous bank statements which will show what surplus cash flow is available.

Lending is first and foremost about repayment capacity.

If there is no evidence of repayment capacity, and in the absence of any further information from the OP as to the nature, purpose, tenure and security for the loan, I would say the decision is was right and their case is very defensible.

If the OP wants to proffer more info then I am happy to give more advice, but as to illegal credit scoring systems and mysterious computers, read John Le Carre.

dazberry

Kersh wrote:

They said there is no evidence of standing orders etc in her account.
Surely thats a ridiculous reason, as all her wages goes in there.
Like, its only for 5k. Is it normal for a bank to demand other activity in an account, surely its none of thir business.
In any case she is switching to my bank, so its their loss now.
She has not got any bad credit history/problems with bills or anything like that.

I work in a finance company (not a bank) and I don't work in risk (aka underwriting) - but there are a number of things here you have to consider and btw: disclaimer - my opinions are not that of my employer.

Firstly, 5K is sweet FA in bank terms - so an underwriter isn't going to spent 3 days deciding what to do - its not personal - just the way they do it - with the 50 other P/Ls in the queue to be done by 1 o clock.

Secondly, remember that for example an ICB check will only show certain info from the last 5 years afaik and without a previous loan or mortgage you don't show any loan repayment capacity. Having no ICB will swing a borderling case. You can pay a nominal fee to review you ICB - it could be incorrect if it exists.

Thirdly, when they are saying they don't know what she spends her money on they are really saying we don't know her repayment capacity. Regardless of her wages going in and money going out - it may not have given a good indication (no - I don't know why). To me (not in risk) it was possible they were saying - we don't know so help us tell you why we should give you the loan.

Forthly (sic!) - the underwriter made a choice (unless a computer statistically did it). Could have been a mistake to refuse - but your G/F could have fitted a profile that had too high a risk. You G/F may be cool and stuff, but for ever one cool G/F there are atleast 10 (see PI:D) G/Fs that are "crazy fools". Of course I'm joking but with no ICB, difficult to measure repayment capacity, there could have been enough people to air on the side of causion tbh.

BTW: There isn't actually much point in complaining to IFSRA until the banks complaint procedures are followed.

D.

Ruu_Old

Get a copy of your credit report and look through it incase there are any errors in there, it happens.

ircoha

Nice answer, dazberry, promo to credit on Monday:)

For the benefit of the OP
ICB is Irish credit bureau
http://www.icb.ie/

Ruu is right, errors do happen, i think it is 6 euro to find out

BuffyBot

Kersh wrote:

My gf gets her wages put into her bank every 2 weeks. It has been this way for a few years now.
She went in enquiring about a loan of 5k. After a few days I told her to ring them and see what the story was. They told her she was refused on the grounds that they dont know what she spends her money on!!
They said there is no evidence of standing orders etc in her account.
Surely thats a ridiculous reason, as all her wages goes in there.
Like, its only for 5k. Is it normal for a bank to demand other activity in an account, surely its none of thir business.
In any case she is switching to my bank, so its their loss now.
She has not got any bad credit history/problems with bills or anything like that.

Does she take it all out straight away?

ircoha

BuffyBot wrote:

Does she take it out straight away?

No he does:D

Kersh

Lol, hers some more info. She earns 30k per year. She takes money out as she needs it. She has just about 2000 in there at the minute, It was a big irish bank.

deRanged

Kersh wrote:

Lol, hers some more info. She earns 30k per year

That's really odd - I earn much less than that and I'm pre-approved for a 20 k loan.