I can’t be the only one facing credit frustration or am I doing something wrong?

I can’t be the only one facing credit frustration or am I doing something wrong?

11:32 AM, 14th June 2022, About 2 months ago 5

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Since the crash and subsequent restructuring of the BTL market, our business borrowing has gone from a business loan to a lot of “personal” loans that now appear on our credit searches. I imagine this is the same for all landlords unless you own your properties outright. Suddenly our creditworthiness has hit rock bottom, despite having a more than respectable score and a healthy income!

There is nothing factored into the risk assessment software that accounts for landlords with BTL borrowing. It’s clear that the software either just views the borrowing as too risky, regardless of the LTV you may have, or they assume costs are coming out of the net income declared, which of course is an incorrect assumption.

I can’t be the only one facing this frustration, or am I just doing something wrong?

I had to buy a new car with cash in 2020 because I didn’t qualify for any finance. I was hugely fortunate to be able to do that, but there is a big opportunity cost in using cash that way, as we use all our cash reserves for growing our business, so that purchase cost significantly more as far as our long-term goals are concerned than the cash value of the car at that time.

It’s also humiliating to be turned down for finance.

How does everyone else deal with this problem?

Is there a sensible solution?




14:35 PM, 14th June 2022, About 2 months ago

We got very frustrated during the Covid outbreak when the lenders all tightened their lending criteria and it became harder to source finance. But we are only small landlords with a lot of equity in our own home and low personal borrowings outside our BTL property so the effect on our personal net worth will not be as high as for the big landlords with larger numbers of properties.

I'm guessing the solution for the big people is incorporation because if you incorporate the loan is not a personal loan.

TheMaluka View Profile

16:09 PM, 14th June 2022, About 2 months ago

Reply to the comment left by Beaver at 14/06/2022 - 14:35My business loan is treated as a personal loan for affordability purposes and has to be repaid from a personal account despite clearly being a loan to a limited company.


16:13 PM, 14th June 2022, About 2 months ago

Reply to the comment left by David Price at 14/06/2022 - 16:09
That's interesting; and is the ownership of all the properties within the limited company or is the limited company part of some other structure?

Kate Mellor View Profile

14:11 PM, 15th June 2022, About 2 months ago

I’m really curious as to whether other landlords have found this since all their BTL mortgages now appear on their credit reports? We were fortunate to have a credit card from before 2008, but now when we’ve applied for an overdraft facility on a personal bank account, or a new credit card to take advantage of a zero % interest period for a purchase or balance transfer, or as I said, to get car finance it’s a big fat “Computer says no!” I imagined that this must be a common bugbear these days?


20:08 PM, 15th June 2022, About 2 months ago

Hi Kate, I've come across this three times now. Properties purchased thru a Ltd company but the lender has carried out a search that registers on my personal credit report. In my scenario, each transaction registered TWO entries on the Hard Search list, both on the same day and with no difference in the entries. It is a concern when juggling a BTL business and personal finance needs.

I have never been able to get to a reason why - having used a broker I don't have any relationship with the lender and the Broker was not able to help.

It would be really helpful if someone with knowledge of these things was able to explain why...

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