Labelled as a bad risk!!

fellwalker09

It's time to let off steam. How frustrating is it to be labelled in this life? Labelled by people who are mere computers themselves -no ability to think laterally. They see only black and white. Yes, I'm talking about those who decide whether you can have a mortgage or not. I'm talking about the whole process. I have just recently paid off last debt, after 15 years slog. A debt that arose as a direct consequence of hubby losing a job -no redundancy pay as did not qualify. Then, within 6 months, our son was born and is seriously disabled. Our family were unable to help and I eventually had to leave work. We seem to have been plagued by bad luck the whole of our married life -some people are, some people are much luckier. So, we decided against bankruptcy, iva's and managed our debts ourselves. Now, having rented privately for years, we are in a position to buy our own home. We have had the income for this for some time, but not the deposit. Now we do -even in these tough times. However, my last debt , although paid, will be a 'stain' on my credit file for a further 6 years, making it a total of 21 years of bad debt. My son is 14 -having lived where we do, for the last 3 years, the local council have no suitable housing for us. Our social worker said we'd probably be offered an 'old person's bungalow' which although is rather small, they would build on a bedroom for him. Wonderful -no garden and we have a dog. My father in law has one of these bungalows -it is so small that my son can't go there as it is unsuitable for his wheelchair. Figure that one out! We can't buy simply because we are labelled as 'those who are irresponsible with money and a bad risk.' NO -we are not. Unemployment can happen to anyone. We did not run up huge debts on loans and credit cards. We have no loans now either. My husband has secure employment -as secure as anyone else in these troubled times. We don't want a huge mortgage by any means, and, the lenders have all tightened up their criteria anyway, reducing the income multiples. The only problem there is that the equation is still unequal - the multiples are the levels used in the 90's -the house prices are way above the 90's prices.
My son is only physically disabled - he needs his independence and an adapted bathroom - difficult to get when renting privately. Have been on the housing list for 1 year, just in case they did come up trumps, but no joy. They can't do magic and times are worsening. Like I say, I wish someone would give us a chance and enable us to have a mortgage. We have been paying rent of £700 /month for 3 years, then we moved, and have been paying £600 for 3 years. It's rather more than social housing rates, but it stands for nothing to mortgage lenders. They are machines and have no ability to assess you individually - in fact it is ludicrous and meanwhile my son suffers to a degree. I don't know if I will have to wait for a full 6 years for the debt to be cleared from my file, or whether in a couple of years it may be possible to try applying for a mortgage. For the present, I am at a loss, forced to remain where we are in unsuitable housing. It's more than suitable for us, just not for my son.

winner12

Hi
I just thought I had to reply to your very heartfelt message life can be unfair at times unfortunately 40% of people who applied for mortgages 4 years ago would not be offered one now but if we go back to 90s it will all go full circle there are loads of houses for sale at present but without mortgage offers they will become scarce rental market increases 10 fold house prices rise due to lack of property on the market banks recover housing market booms we go another 20 years and it goes bust again back to square one and everyone will talk about the noughties and not the 90s hang in there you still have your lovely son I always try to tell myself that things dont go bad all the time and how fantastic you paid off your debts and eventually when the banks settle down again Im sure you will be able to get mortgage.

suburbanwifey

I was very touched by your story and I can see exactly where you are coming from. It seems ludicrous to me that you are considered a bad risk for a mortgage when you have cleared debt and paid it off - many out there go bankrupt where all their debt is wiped off and they haven't paid a penny, much of that debt being debt they ran up on half a dozen credit cards, knowing fine well they had no way or intention to pay it back. I feel sorry for the card companies who sadly had many customers like that over the years, so to a degree I can see why card companies are clamping down on bad payers, putting charges on people's houses and the other 'bad' things people consider on here that they are doing to them.

I've always used credit wisely and always paid back what I have borrowed, as a result I have always had and will continue to have (touch wood!) an excellent credit rating and banks, card companies have always, within seconds offered me what I want, when I want it and at preferential rates, mostly at 0% rates..its a sad fact of life that the people with money and who can afford to pay, get credit easier and cheaper. The one's that need it, cannot get it or if they do get it, the interest rates are so high it cripples them. But the banks/credit card companies have to do this because there is a 'risk' they will not get their money back and to be quite honest, they often don't, so they are right to think that.

But, when someone has run up debt and paid it off, to me that shows someone who has learnt some valuable lessons in life and that someone then deserves a chance. Sadly, even after paying off debt, your credit record is rubbished for a further 6 years. This happens to everyone who defaults. I would rather starve for a month if I had to than default on any credit I have ever had, because the effects of just one default can trash your life so badly, to me it just is not worth it. The difference between good credit risks and bad ones is that someone who is a good risk, may have available credit to them of over say £30,000 but the most they ever owe at any one time is probably less than a few thousand. Bad risks gets a 5K credit limit on a card say and within a year that limit is maxed out....they think because its there, hey! lets enjoy life and spend it, forgetting that it is supposed to be paid back, it was 'credit' and not a gift.

Your story is very sad because you obviously have had a rubbish time but have come through it as a family, you stayed married, you paid your debts and you are no doubt a wonderful, loving mother.

You have a lot to be thankful for, you really do and your wee man and your hubby are what really matters in life, money is just money after all, credit is just credit, none of it really matters in the great scheme of things. In 6 years time those defaults will fall off your credit sheets and you be be once again clear. Life throws many spanners in all our paths and very few escape problems or hardship or pain.

I feel for you because what you pay in rent is more than I pay for my mortgage on a beautiful home and to me, if you can afford that rent, you can afford a mortgage. You are right, to 'them' it doesn't make a blind bit of difference. They spent a decade lending stupid amounts of money to people who abused the privilege of credit and thus made millions of losses. This has scared them and now the lenders cling onto their money unless they 'know' they have a pretty good chance of getting it back.

Bankrupts can get mortgages, so I know that someone, somewhere out there will lend you the money if you search hard enough. You haven't been made bankrupt, so you are in a better position than some who felt so overwhelmed by their debts that they chose to walk away.

You can hold your head high, you paid your debt but are now angry that you will be penalized for 6 years, and you are right to be, I would be too.

I've always believed rent money to be dead money, renters are paying the mortgages of the wise and i'll have people who shoot me down for saying that, but its how I think and I'd rather pay £600 a month off a house I own with a mortgage, knowing that one day I will own it outright and its value will belong to me, than line the pocket of a landlord who makes his fortune off my back.

Six years is a long time to wait, but for the joy of owning your own bricks and mortar, its a wait that will be worth it in the end. In the meantime, if you cannot get a mortgage, save as much as you can, and use credit wisely, you build a great credit rating by borrowing and paying back and if you do that over the next few years, a lender may lend to you way before the 6 years are up that it takes for the defaults to drop off your account.

I've waffled, just my thoughts...hope it all works out for you.

DVardysShadow

fellwalker09 wrote: »

However, my last debt , although paid, will be a 'stain' on my credit file for a further 6 years, making it a total of 21 years of bad debt.

Your last debt remains a stain for 6 years from the date of first default surely? You cannot have defaulted that recently, surely?

fellwalker09

Thanks for all the support. Makes me feel a bit more positive. I guess if the worst comes to the worst, I can wait 6 years to buy. The only reason I feel urgent to do so is because this year I hit the big 40! and more importantly, my son really needs to have an adapted bathroom in the next 2 years -I mean, he'll be 16 by then and does not want his mother helping him on and off his bath chair. He needs his privacy and some independence.

As for the default - we never got one, believe it or not. My debt was with Black horse finance (car loan in 1995). My hubby and I entered into reduced payments in 1996, after he lost his job. They were ok about it really. Our situation worsened and we were making token payments for years -they still never issued a default. We tried to get a mortgage 3 years ago -we were turned down due to this loan being a bad debt and outstanding. 1 year ago, checked credit file, and there is still no default. The balance was listed as a Delinquent balance of £4000 ish and the status was ?6 -I looked it up anyway and this meant the payment was 3-6 months late, thus in arrears. The term default may be absent, but anyone doing a search will know the score. If they had defaulted us at the time we actually did default on the agreement, in 1996, it would have gone years ago. Even though they accepted our payment arrangement and the payments were always on time -standing order- the payments are listed as late rather than as an arrangement. So, as things stand, it will be 6 years before it goes.
I did contact the ICO 1 year ago, and lodged a complaint re the default issue, but they are snowed under and I'm still waiting for someone to contact me. Probably no point in challenging it now. I wish they'd given me a default at the time -had a couple of other small debts and they did. Typical. The worst one has done a clever thing though, don't you think? They have made us pay, lurking in the shadows, never going away until they finally got their money. A debt repaid is far better than having gone bankrupt or having it written off partially etc, but boy am I to be penalised for this one. Anyone can lose a job and I truly feel for people today in these trying times when homes are on the line.
Thanks for asking though.:(

rich11

Keep trying.There are lenders out there who will lend despite one black mark on your file.How much are you wanting to borrow and what sort of deposit do you have if you dont mind me asking