Mortgage with settled defaults

Alex_W

My credit score took a hit a few years back defaulting on an overdraft and loan. One was settled back on '07 and we're trying to get a mortgage on the Home2Own scheme (where you get up to 15% paid by the government scheme and 15% by the property developer, interest free for 5 years before paying back).

The financial advisor said obviously with an outstanding amount on a defaulted account, there's no point in continuing, but if this gets settled my credit score will go up and possibly get a mortgage and on this scheme, because the 30% is paid as a deposit there are lenders that accept a defaulted past.

My partner took out a loan so we could get the debt settled (baring in mind I had been making non-stop monthly payments since the date of default) and having settled the other amount just last month my rating hasn’t changed a single point and was refused the mortgage. :mad:

Am I stuck this way for the next 3 years (until they drop off my report)? Because having this score (even though I owe nothing at all) I cant get further credit due to this and therefore cant demonstrate good credit. I'm going to try and see if the bank will name me on my partners loan / credit card too.

benjo

There is a guide to improving your credit rating, with prepaid credit cards etc, otherwise unless the default was registered by mistake then it will remain there for 6 years.

Im not a mortgage advisor, I know a default will affect your application, but I dont know by how much.