Credit Score over 800 - Keep getting denied loans

[disdreamin]

Sorry for the non sequitur earlier - autocorrect changed payments to parents. SMH.

[redbeard]

One lesson that may be hard to learn, or at least to understand, is that credit scores do NOT get you approved for loans.  Your credit report, along with a bunch of other factors do.  Your credit score is then used to determine the interest rate of the loan.

In this case, one of the 'other' factors is the reason for the loan.  Consolidating bad debt, especially not your own bad debt, it probably not viewed as a strong reason to give a signature loan to someone.  I agree with the comment about saying its for a vacation or other type of thing.....  Also, my experience with banks is they don't really like signature loans anyway, especially of this amount.

You might try a smaller amount as well, it it works for the situation.  I'm guessing that $5000 or less would be a much better chance of approval.  

Another alternative (good, bad or ugly) is to have your boyfriend find a company that will help him with a debt management plan.  I know DMP's aren't discussed much here, for good reasons, but it might be something to look at.

Dan

[Anonymous]

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@Anonymous wrote:

I take my credit very seriously. In the last 8 years I've gone from no credit to excellent. I've never had a late payment. No derogitory marks. I charge everyday items and then immediately pay them off to gain points. I've not accrued a penny of interest in the last six years. I have 11 accounts on my report all in good standing. My oldest account is over 6 years old. I honeslty thought the banks would be drooling over my application. I'm trying to take out a $8,300.00 loan to pay off my boyfriends (been together over 8 years) credit cards. He had great credit up until last year when a series of unfortunate events caused him to max out all three of his credit cards. He is drowning in this debt and cannot afford the minimum payments so his credit plummeted. I'm applying for the loan because I would get a much better rate. I take full responsibilty for paying it back. It will come directly out of my bank account and I'll worry about getting the money from him. 

The first loan attempt was a sit down at Wells Fargo. I went into it not wanting anything to do with his loan but after speaking with the gentleman at the bank I realized it was best that we do a joint application with me being the applicant and my BF the co applicant. The monthly payment was perfect. The APR was great. We were so pumped! I thought for sure we had solved this situation. Then I get the message this morning that it was denied. They're sending me a letter in the mail with an explanation so I have no idea what the reson was.

Feeling defeated I decided to appply to a bank online. This time I would be the sole applicant. Again everything about the loan offer was perfect. They had me call them because they were confused as to why I was requesting a loan to pay off debt that I don't have. I explained that I was doing it to help out my long time boyfriend because he had more debt than he could handle and a terrible score because of it. I expressed that I would be paying for the loan, not him. I anxiously awaited the e-mail which I was so certain would be congratulating me on my new loan approval. Nope... Denied. Again, don't know why because they take 2 days to tell you. 

I'm not going to apply for any more until I read what went so terribly wrong... I just can't wrap my head around it. I was thinking next time maybe I'll put that it's for something else but then I have no way to prove that I need a loan for anything. 

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Yep, just when you figure you have the credit world figured out, it stands you up and slaps you across the face in both directions.

While you are waiting for the denial reasons to come back have you thought about a balance transfer from his cards to one of yours? You didn't mention if any of your 11 accounts in good standing are in the form of Credit Cards, but there are many out there that can be used for just this purpose and without having to give a reason for doing it like you have to with a loan.

If your credit is truly what you say it is, you should be able to get that much of an initial credit limit with the Citi Diamond Prefered. I received $8,600 initial limit earlier last year with my credit and I put that I would be transferring 7k to the card when I filled out the application. Just let them know how much you want  when filling out the app.

Anyways, just food for thought and All the Best.

[Anonymous]

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@redbeard wrote:

One lesson that may be hard to learn, or at least to understand, is that credit scores do NOT get you approved for loans.  Your credit report, along with a bunch of other factors do.  Your credit score is then used to determine the interest rate of the loan.

In this case, one of the 'other' factors is the reason for the loan.  Consolidating bad debt, especially not your own bad debt, it probably not viewed as a strong reason to give a signature loan to someone.  I agree with the comment about saying its for a vacation or other type of thing.....  Also, my experience with banks is they don't really like signature loans anyway, especially of this amount.

You might try a smaller amount as well, it it works for the situation.  I'm guessing that $5000 or less would be a much better chance of approval.  

Another alternative (good, bad or ugly) is to have your boyfriend find a company that will help him with a debt management plan.  I know DMP's aren't discussed much here, for good reasons, but it might be something to look at.

Dan

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@redbeard,

100% agreed.  Alot of people automatically assume a good score equate to "an approval".  A lot of factors goes into getting an approval.  The score is just a small part.

[Anonymous]

try the lending club?

I have many friends who have had a great experience with them, and they are different type of lending service. Most of my friends with good credit only are paying about 8-9% total interest on a $10K loan over 24 months of payment. You can take up to 5 years to pay them back i think, depending on loan amount.  

[takeshi74]

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@Anonymous wrote:

They're sending me a letter in the mail with an explanation so I have no idea what the reson was.

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You'll definitely need that first.  Also keep in mind that it's never just about a score on its own.

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@Anonymous wrote:

If they're denying me because of his debt then that's their loss. We are in a commited relationship and I'm commited to helping him. That doesn't mean I'm stupid enough to get myself into uncontrollable debt. Maybe they should ask me what I have in my savings to put their minds at ease.

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They don't know you and they can't determine your commitment to your relationship or how well you can prevent his debt from affecting your credit.  You need to look at the factors that they're considering and how to minimize how risky you appear to them.

[Stylez]

A friend of mine took out a loan to pay his girlfriend's credit card debt. So I don't think the reason for the loan in of itself is the reason for the denial. The reason for the loan combined with your cashflow could be why you were denied.

[Anonymous]

If you have a sizable chunk is savings why not just pay off his cards with that and have him make monthly payments to you?

Also...you didn't state what your monthly debt to income ratio is. This could be an issue of a bank not believing that you have the monthly income after bills to pay this bill.

And...a final piece of advice. Get something in writing/notarized from him that this is NOT A gift and that you are making a loan to him. Outside of marriage you have no protection in this. And as someone who is currently dealing with a $110,000 loan to an ex court battle...I have already spent over $10,000 on lawyers in 3 months. Protect yourself

[Anonymous]

UPDATE:

I was just approved for my loan!! Woohoo!

I realized that I have 30 days to go wild applying for loans. I honestly thought the inquiry's would post immediately. I guess third time is a charm becuase it finally worked out for me. I found out the first loan from Wells Fargo was denied due to BF's history of non-payments since we listed him as the co-applicant. The second loan from LightStream (online lender) was denied because they said I didn't make enough money. This is bologna because the monthly payment was around $250 and I have a cool 800-1,000 to play with every month and that's after my 3 different automatic savings debits. 

I took the advice of many and decided I'd try one more time before giving up completely and going the shared savings route with a credit union. (My savings are my savings.. they're not for anyone to spend and that includes me). I went on lendingtree.com and said I was looking for a wedding expenses loan. I chose a bank, filled out their form, spoke to a rep yesterday afternoon, and just got the e-mail now that I was approved. 

So here's what i've learned:

1. Honesty and assuming others especially those representing a major corporation/bank will have sympathy for one another is a completely irrational way to think. You must lie. Wedding expenses work especially well with women reps (bonus if they just got married too like mine). 

2. That's really all I learned...

Going back to the second denial, they said I couldn't afford it but the third bank is making me pay $270ish over 3 years rather than $250ish over 4. I'm still certain it was because I made the afformentioned mistake of telling the truth about the needs of the loan.

I really appreciate everyones input no matter how critical. You guys opened my eyes to the wacky world of personal loans. Having only had auto lease loans and credit cards I figured everything was as simple. Good credit? You got it, lady! 

Also, one of the first things I did when I put my foot down and decided to take charge of my boyfriends financial blackhole was I made him sign a very detailed contract. I know that 8 years gets me nothing if things go sour and there's no marriage license in play.

Anywho, time to celebrate!

[Anonymous]

Glad it all worked out...Way to stay after it