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Topic # 68365 20-Sep-2010 14:39
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I cannot get credit anywhere, and I am wondering if it is due to the new (dumb) credit rating system, or if finance companies are running scared? Anyone care to comment?

For those who don't know the credit system was changed 2 Aug 2009. It is now based on perceived risk, rather than past history (If it was based on my history it would be 1000/1000).

If I look at their website, and add commentary it says:

How do I improve my VedaScore?

How do I move from a poor VedaScore to average?
? Pay outstanding loans (I have no loans)
? Not default on your debts/obligations (never done so in my life)
? Not enter bankruptcy (never been bankrupt)

How do I improve my average VedaScore?
? Show personal and financial stability (Lived at 2 addresses last 25 years, same 2 jobs last 6 years since uni)
? Consolidate your outstanding debt (No outstanding debt)
? Only apply for credit when you really need credit (Have applied for a fair bit of credit, accepted ONLY ONE I applied for)

How do I keep a good VedaScore?
? Maintain your current financial position (Nothing has changed in 2 1/2 years at all)
? Borrow from reputable lenders and pay your debts (Only borrowed from banks, except ONE HP purchase from Noel Leemings through GE)

I have no clue why my score is so rubbish? Its in vicinity of 250 from 1000. Is it demographics based? Is a single, european, 30s, male, flatting, a "trouble" group or highest risk category? IDK. I have requested my credit file from Veda and see no real reason why my score is so appalling that I cannot get finance on anything.

Or is it not about the credit score at all, but about finance companies being scared to lend to anyone but top dollar earners?

TBH if I can't get credit even for a minor purchase, I might as well go bankrupt to wipe student loan? Only thing stopping me is possibility of inheritance, which would be swallowed up I presume.

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  Reply # 382272 20-Sep-2010 14:44
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I'd ask them to investigate a bit more then, something doesn't sound right.




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  Reply # 382274 20-Sep-2010 14:52
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IlDuce: TBH if I can't get credit even for a minor purchase, I might as well go bankrupt to wipe student loan? Only thing stopping me is possibility of inheritance, which would be swallowed up I presume.

Plus, it would be a stink thing to do.  You took out the loan with a promise to pay it back.  You're not in financial hardship (or so you would have your prospective lenders believe) so the only reason to do it is a shortcut to improved financial position.

If it's only a "minor purchase", save up your money as if you were paying the loan and buy it at the end of the "term".  Do you think you'll have more of a chance of getting credit after you declare bankruptcy?!

I am interested in anything you find out though.  I have no idea how the credit check stuff works.  I'd be horrified if I "failed" the check, but who knows what they base it on.  I imagine it's not only your past history and current position but also your ability to pay back the loan.  You haven't told us how much you are wanting to borrow and what your student loan is, but would you lend someone $1,000 if they had a $100,000 student loan?

 
 
 
 


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  Reply # 382291 20-Sep-2010 15:16
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IlDuce: ? Only apply for credit when you really need credit (Have applied for a fair bit of credit, accepted ONLY ONE I applied for)


This sounds like the only thing that may be giving you a bad score.  Each application will show up on the credit report and they don't know that you did not accept the offer, they only know that a credit check was done.

Next time you get turned down try asking the people at the finance company to help you understand why.  They are the only ones who can really tell you.

I don't know how much notice people take of the "Vedascore" either, my view is it was just a way for Veda to put their prices up.  The score doesn't add any value over the raw data that they have always provided.

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  Reply # 382294 20-Sep-2010 15:20
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Have you tried approaching the finance company directly to see what they say, rather than listing the salesperson in teh store?
What most finance systems do, they rank you based on how you score when you fill out their forms.
Also, finance companies cannot see if you take out finance/credit cards. BUT they can see if you apply for a lot of them. So if you are wanting a LCD TV, and approach ALL retailers/banks/finance companies and apply for their finance, then they ASSUME that you have accepted all of them.
Have you considered having a guarantor, like a parent, or someone who lives at the same address? If you are financially secure, then your guarantor has nothing to worry about.

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  Reply # 382303 20-Sep-2010 15:26
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IlDuce:Only apply for credit when you really need credit (Have applied for a fair bit of credit, accepted ONLY ONE I applied for)
Bingo.

Have you gone to a broker to get options for finance?
Some will go out to 25 lending agencies to 'find you the best option' but this leaves your credit history looking extremely desperate, like you needed money and were going everywhere to find it.

What is your history with trying to find out about gaining credit?
I'd look a bit deeper into this, and like others says, approach the ratings company direct if you can and ask for an assessment of your assessment.

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  Reply # 382307 20-Sep-2010 15:30
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The scorecard you are referring to is still based on our 'negative' reporting within NZ.

the score between 0 -1000 is based on the types of credit being applied for i.e. Banks, Finance Co, Utility Co, Employment agency's, Rental Co (checking on tenants), a mix of these can adversely affect you, namely; more than 3 inquires within 6 months the same category will give you a bad score.

If you apply for credit that inquiry stays for 5-7 yrs, same if you have had collections, defaults or judgments.

If you are under 25 yrs, then if you have more than 10 inquiries since 18, then that would raise alarm bells (I am referring within the same grouping, i.e. Finance Co & Banks)

Most people are around 535-650. that assuming mid 30's, married, kids, living same house > 4 yrs, same job 2 yrs, no adverse info etc.

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  Reply # 382324 20-Sep-2010 15:54
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So by applying for credit multiple times within a limited time frame the OP is actually worsening their chances? Incredible.



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  Reply # 382330 20-Sep-2010 16:01
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bazzer: Plus, it would be a stink thing to do. You took out the loan with a promise to pay it back. You're not in financial hardship (or so you would have your prospective lenders believe) so the only reason to do it is a shortcut to improved financial position.


Well I never wanted to go to uni in the first place, and did not want the associated big debt, but being 17 and naive I was told by numerous adults (teachers, friend's parents, family) that going to uni virtually secures a blissful life with no trouble finding work, and no menial jobs or anything under $50K per year. That sounded right - look at them, all successful with houses, new cars, happy children, etc. I only went as I truely believe what they said... that I would earn so much that repaying the loan would not be an issue. But here we are 12 years on, one of the most widely qualified people in the country for my age, no decent job in sight.

bazzer: If it's only a "minor purchase", save up your money as if you were paying the loan and buy it at the end of the "term".


Already said I had the money. Just applied for finance as a test, like a last effort to see if its truely toast. At worst, all up finance charges would have cost $35.

bazzer: Do you think you'll have more of a chance of getting credit after you declare bankruptcy?!


Of course not. But the chance can't get any lower than it currently is.

bazzer: I am interested in anything you find out though. I have no idea how the credit check stuff works. I'd be horrified if I "failed" the check, but who knows what they base it on. I imagine it's not only your past history and current position but also your ability to pay back the loan. You haven't told us how much you are wanting to borrow and what your student loan is, but would you lend someone $1,000 if they had a $100,000 student loan?


The finance forms I filled out did not ask assets/liabilities, just income and expenses so they have no idea, and yes the loan is $100,000 BTW. I think its been answered below, seems that my credit rating has been destroyed from repeated credit checks.



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  Reply # 382333 20-Sep-2010 16:10
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graemeh: This sounds like the only thing that may be giving you?a bad score.? Each application will show up on the credit report and they don't know that you did not accept the offer, they only know that a credit check was done.

Next time you get turned down try asking the people at the finance company to help you understand why.? They are the only ones who can really tell you.

I don't know how much notice people take of the "Vedascore" either, my view is it was just a way for Veda to put their prices up.? The score doesn't add any value over the raw data that they have?always provided.


Asking for a bank statement would clear it up as there are no recurring outgoing payments. The finance companies will not answer specifically, only generic phrases, like "doesn't match our overall ideal client type", which could mean anything?

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  Reply # 382340 20-Sep-2010 16:23
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IlDuce:
graemeh: This sounds like the only thing that may be giving you?a bad score.? Each application will show up on the credit report and they don't know that you did not accept the offer, they only know that a credit check was done.

Next time you get turned down try asking the people at the finance company to help you understand why.? They are the only ones who can really tell you.

I don't know how much notice people take of the "Vedascore" either, my view is it was just a way for Veda to put their prices up.? The score doesn't add any value over the raw data that they have?always provided.


Asking for a bank statement would clear it up as there are no recurring outgoing payments. The finance companies will not answer specifically, only generic phrases, like "doesn't match our overall ideal client type", which could mean anything?


It's easier for them to just say no, rather than looking harder at your application.

The bank statement would just prove that you had no recurring outgoing payments from that account but doesn't prove that you don't owe money all over town.

You may just have to wait until the privacy rules are changed and companies like Veda are able to record "positive" credit information too.  This will show that you don't have lots of outstanding loans but would still leave a credit control person wondering why you applied for so much finance.

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  Reply # 382341 20-Sep-2010 16:25
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IlDuce:
bazzer: Plus, it would be a stink thing to do. You took out the loan with a promise to pay it back. You're not in financial hardship (or so you would have your prospective lenders believe) so the only reason to do it is a shortcut to improved financial position.


Well I never wanted to go to uni in the first place, and did not want the associated big debt, but being 17 and naive I was told by numerous adults (teachers, friend's parents, family) that going to uni virtually secures a blissful life with no trouble finding work, and no menial jobs or anything under $50K per year. That sounded right - look at them, all successful with houses, new cars, happy children, etc. I only went as I truely believe what they said... that I would earn so much that repaying the loan would not be an issue. But here we are 12 years on, one of the most widely qualified people in the country for my age, no decent job in sight.


Those "successful adults" are probably now mostly divorced and bitter with angst ridden teenagers and living out of rented flats after paying their divorce lawyers most of their money.



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  Reply # 382348 20-Sep-2010 16:31
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kingjj: So by applying for credit multiple times within a limited time frame the OP is actually worsening their chances? Incredible.


To expand, sometimes I have made 1 purchase, which in the background has had 3 checks done. ie purchased a car from car yard, and in background they applied for credit with 1 company, declined, then another, declined, then another, accepted. I had no idea until I got my Veda file and saw it there.

Apart from signing up to mobile plans, internet, phone, LPG cards, student overdrafts, all the other (at a guess) 12 enquiries were over only 2 purchases. I had no idea doing so many enquiries would destroy my credit rating otherwise I would never have done it. They all kept asking for guarantors so I'd just move onto the next finance company hoping to strike one who was not going to ask for one.

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  Reply # 382412 20-Sep-2010 19:05
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IlDuce:
kingjj: So by applying for credit multiple times within a limited time frame the OP is actually worsening their chances? Incredible.


To expand, sometimes I have made 1 purchase, which in the background has had 3 checks done. ie purchased a car from car yard, and in background they applied for credit with 1 company, declined, then another, declined, then another, accepted. I had no idea until I got my Veda file and saw it there.

Apart from signing up to mobile plans, internet, phone, LPG cards, student overdrafts, all the other (at a guess) 12 enquiries were over only 2 purchases. I had no idea doing so many enquiries would destroy my credit rating otherwise I would never have done it. They all kept asking for guarantors so I'd just move onto the next finance company hoping to strike one who was not going to ask for one.

That's pretty harsh.  Current climate probably doesn't help.

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  Reply # 382575 21-Sep-2010 08:28
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Take charge of your credit rating from now on then is all you can do. Don't let companies search out requests to more than one finance company at a time, and certainly not without your permission. Ask questions, be proactive about it now you know.

Good luck with a loan on a house if you ever need one. It might need external security, like a parent etc to cover the risk. A whopping deposit will always help too.

Re Uni, most of the people telling me to go there didn't go there themselves. Most people have really false ideas about what uni is like/about. Just having a qualification, even a big expensive one, doesn't mean you are right to just jump into high paying jobs.



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  Reply # 382582 21-Sep-2010 08:57
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Has this idea taken affect yet?....

http://www.makingtaxeasier.ird.govt.nz/businesses-employers/i-dont-think-its-fair-some-people-owe-ta...

If it has it would explain why I, and my guarantor, were shot down.

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