THE saga now commonly referred to as “the six-nine-nine cars” is far from over, and I’m busy investigating a few humdinger cases involving grossly inaccurate information on credit application forms, and a car sold as new when its registration history says otherwise.
But here’s a story of someone who thought he had a good credit record but could not get a bank to finance a used car.
The 30-year-old man, who asked to be identified only by his first name, Andrew, explained: “I’m trying to get vehicle finance but the only answer I get from financial institutes is that my credit scoring is too low or bad.
“I don’t have any judgments or defaults on my name, and all my current accounts are paid on time and up to date. The only thing that reflects on my credit report is that I have ‘39 enquiries’ but, as stated on my credit summary, ‘the enquiry that is recorded will not adversely affect your credit standing’.
“Please look into this matter, as I’m getting married next year, and this issue has been going on since last year, which has affected my life depressingly and my future progress in purchasing a vehicle and a house. It’s like I’m blacklisted.”
Since Andrew had attached his TransUnion credit report, I asked that bureau’s Carla Gilmour if she could shed light on why someone with an apparently good record was having such trouble getting credit.
“Based solely on the information contained in the consumer’s credit report, a lender would determine whether or not the consumer is in good standing,” she began.
“But each lender has their own policies and affordability assessments they use to arrive at a decision and it’s the lender’s responsibility to disclose to the consumer the reason for not granting credit.”
Gilmour confirmed that a “high number of enquiries” by various lenders could affect a credit provider’s willingness to approve an application, as the consumer would be considered “credit hungry”.
How ironic – the more someone tries to get credit, the less the likelihood of them getting it, as each enquiry noted on their record makes them appear more desperate.
Be warned.
Andrew responded: “If that’s the case, when I was shopping online for the best rates, in regards to finance, there was no product awareness or information stating that if you apply, it could affect your credit standing.
“According to my Trans-Union report, my scoring is high. Please check with finance houses for a justification and a solution.”
I was happy to oblige.
Trevor Browse, managing executive for Motor Finance Corporation (MFC) at Nedbank, one of the lenders that turned Andrew down this year, said Andrew’s concern that his application was declined purely because of his bureau score was “unsubstantiated”.
“The behavioural score received from the credit bureau was average with no defaults or judgments reflecting. Factors that may have led to the application being declined include the fact that he applied for a 2006 vehicle, and a principal debt of R74 110, when the retail value of the car is R66 300, and the trade-in value is R56 200.
“As MFC we are unable to comment on the client’s concern regarding the number of enquiries to his bureau profile. MFC only made one enquiry when the application was received in May and the same bureau information was used when we received an updated vehicle finance request for the client in June.”
WesBank said Andrew had made four arrears payments on an account “a while back”, but that was not the reason for the decline. “The equity on the asset – an eight-year-old car – he wants to purchase is very high,” a spokesman said.
“This means that the vehicle he is applying for is being sold for more than what the actual value of that car should be, and as such poses a risk for both the client and WesBank.
“The car is also bordering on the maximum age that we would consider for finance.
“Therefore, considering all of these factors, not in isolation but a combined view, the application was declined.
“The customer can improve the odds for his application to be approved by choosing a newer car which is priced more appropriately. Also, he should consider paying a deposit, or increasing the deposit.”
Strange, then, that the only answers Andrew says he was given for the declines was related to his credit record, not the overpricing.
The National Credit Act states that on request from a consumer, the credit provider must give, in writing, the “dominant reason” for refusal.
Of course, the “pay a deposit or increase the deposit” advice brings to mind the “R699pm” Satinsky car deal, given that the thousands who were granted those bank loans paid no deposits at all.
Coupled with relatively high interest rates, they now pay hefty monthly instalments on less popular entry-level cars for the rest of a six-year term.