The arse covering is strong with this one.
To be clear, I am not in a position that I have to apply for credit - I do have a mortgage, but largely because I have such a stunningly good rate on that it is is almost silly to repay it. I am, finally, at this stage in my life, reasonably well off. I too am surprised at this, and I know it could change any day - the industry I am in is very variable, and running a business is always a risk. I have had a lot of very much not well off years too and so am reaping some of the rewards of that at last.
But, my daughter wants a loan - and I am trying to make them all stand on their own feet and not just scrounge off me all the time. Sadly she is just starting with a job and rented house, and so she is not good on the whole credit rating, so needs a guarantor. It is not Wonga, thank arbitrary deity, but not a brilliant rate, but she will learn.
Being guarantor, I am happy to do, but it means I end up going through the whole fiasco of credit checking as if I was getting the loan!
It is a fiasco and arse covering exercise and not really a solution. OK, maybe some people are stupid enough to call up and give actual details and be turned down, but even the thickest of people will soon realise that you can just make shit up.
At the end of the day there are two types of information - things they can verify, and things they cannot. Now, having had the conversation, they can verify exactly what I pay on my mortgage each month - so WTF ask me that! They can also make good guesses at food, council tax, TV licence, and so on. What they do not seem to actually know, and what really matters, is income. I was honest as I had no reason at all not to be, and having stated my income they could have cut the whole process short on the basis that anyone earning that much is not going to have any problem with the loan repayments.
But no, they insist you cover every detail, including that apparently I have a mobile phone account with someone that has a £3 balance. I suspect it is a credit balance on some pay as you go type thing from years ago, but that needs to be explained!
The real stumbling block here was mortgage payments. I have a base rate plus fixed offset mortgage. So guessing payments over next 5 years, which is what they wanted, depends entirely on the Bank of England base rate changes over next 5 years.
I am sorry, but I do not have a crystal ball - I cannot predict that. It is not reasonable, or helpful, to ask me that!
They moved on to the "what would you be happy with", well, (a) I would be happy if it stayed as now, and (b) it does not matter if I am happy, if the rate goes up I pay more - I have a contract. As I explained, if the rate was not reasonable I'd start clearing it damn quick.
I ended up along the lines of "what is the balance left each month - I'd be 'happy' with mortgage rising to consume all of that"... It is a nonsense question to ask, and clearly does not actually represent any sort of "responsible lending"...
Being a responsible lender should not be covered by an arse covering script like this, and when anyone that can afford to pay has to go through this, they should have some simple short cuts. I should have billed my hourly rate for this as it was well over an hour.
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