how long back to mortgage lenders look on a credit file?

Grimbal

We'd like to start applying for mortgages. My credit file is spotless, but by husband's is not. It's pretty good from mid 2007 onwards (ie since with me), but before that there were a lot of missed payments and "agreements to pay" on his record.

All loans have been paid off since then, and apart from a car loan and a very small student loan, he has no other debts.

Does anyone know how far lenders look back on a credit file to determine lending suitability please ?

many thanks

Liz

luckyfool

6 Yrs is as far back as they can see. The odd late payments on unsecured credit over 1 yrs ago would have limited impact. Whether the agreements to pay show as having defaulted, and when everything was cleared will have an impact as well. There are lenders that go up to about 80% without credit scoring, some offering very competitive rates and they will do a more traditional underwriting job. Alternatively if things were cleared some time ago, and there is a decent deposit, it might be that you would pass the credit score with a more automated process oriented lender as well.

A good broker should be able to find out more from you, and then test the water from a lender where it will not leave a footprint on your credit reports or impact on your credit score. They will also find it helpful if you have a copy of your experian or equifax reports.

Grimbal

thanks very much for the quick reply. Prior to mid 2007, he was ill for a few months on the trot & unable to make payments. However, these payments were made a while ago & the loans have all now been paid off in full.

We would have roughly a 46% LTV, so tried to get HSBCs 5year special rate fixed deal yesterday (also been a customer of theirs for 20 odd years). The financial side of it all went down fine, very happy that the requested loan was affordable & that the multiples stacked up. However, when we carried on into getting an AIP in place, and the credit record was checked, it was an immediate "no".

I've been a bit shocked to be honest. Asking for a small LTV, with the last 3 years of us both having a good credit record. Do you think it's worth going to speak to HSBC locally to a "real" person rather than a data inputter who just abides by the "computer says no" decision ?

luckyfool

Grimbal,

It's pointless in my opinion. HSBC do not want the custom of anyone with a less than perfect credit history, they are offering market leading rates, and can afford to turn away all but the very lowest of the low risk customers. Its just part of their corporate culture just now.

Without seeing your credit report and know exactly what's there its impossible to say with any certainty which lender(s) would do it, but from what you say I think a high street lender offering rates not a million miles away from HSBC should be findable that is willing to do the mortgage.

"Computer says no" is just the way it works with alot of the big banks now, and human intervention or appeals tend to be a waste of time. C&G, Barclays, Abbey etc, if you fail the credit score then you can forget it. The key is approaching the right lender where their credit score is not a strict as HSBC (which wouldn't be difficult), or where they do actually have some discretion for their human underwriters to make a common sense decision on a case.

Grimbal

thank you so much for your reply again - very enlightening. I need to find a real person to talk to - a real person who will look at the actual credit records & not just simply tally up the red blobs and the green blobs , but look at the historical trail: i.e. that in the last 3 years, OHs record has been all green lights (ok 2 anber as late payments, but just that) & realise that three years ago he turned a corner (about the time he met me !)

I'm very lucky in taht my employer is in a scheme that will offer me free mortgage advise from an all of market broker - so, I'll just update them with the new information regarding the credit report & take it from there
Liz

Mobility151990

NBS only look at 12 months for most.

Grimbal

NBS? Is that Nottingham BS please ?

Mobility151990

Nationwide Building Society.

Mobility151990

What l will say as well is this - (at least it applies to NBS, maybe other lenders too) - if you have a current account with them, you apply for mortgage, get referred because of bad credit ages ago like this, then because you're an existing customer they'll refer the case, basically to override that computer spitting out an immediate no! Ask each lender first if they have this facility. Then l'd get a current account with them, swap salary to it, use for 6 months (as credit searches in 6 months look bad), so after the 6 months, re-apply then uve got an account with them and they'll happily refer

Grimbal

Ah! thanks for the clarification - that's good to know. Just had a quick look on their website & there's a 5yr fixed at 4.49%.

Can I ask how you know about NBS please ? It's just that we have to be fairly sure about the lenders checks before we go and apply

Liz

Mobility151990

I work for NBS as a mortgage advisor O:) we don't refer at all (unless a mortgage brokers business development manager or some other special reason) for non customers, but for existing customers we do try and go that bit further to see why they got rejected and help out...