getting mortgage after defaults

Bagster

Hi

Several years ago I had another bank account.

I stopped using it as it wasn't my main bank account and a few years ago I got a letter from a debt collection agency saying I owed them money for this account which had gone overdrawn.

I paid up immediately and am now thinking about buying a house. After looking at my credit report this account shows up as being a default that been now settled.

I have read that defaults go away after 6 years and 6 years will pass since the date of default in June this year. Everything else on my credit file is good, i have no outstanding balances and other than a small and manageable loan i dont owe anything.

Has anybody been in a similar position to me? Does this mean after 6 years it will be removed from my credit record and i'll be able to get a mortgage as if the default never occurred?

Soph86_2

Yes, the default will drop off your credit file 6 years after the default date, and so will no longer appear on your credit file around June. You will probably struggle to get a mortgage with it on your file, so I would get a copy of your file in, say, July and check it has dropped off before you apply for a mortgage. Once it has dropped off, providing there is no more adverse credit and you meet all the other lending criteria, you should have no problem getting a mortgage.

There are rumours about defaults not dropping off until 6 years from the last date you made a payment - this is not true, it's 6 years from the date of default, regardless.

Hope this helps, and good luck with your house hunting!

Soph x

Tixy

Hi

It can be possible to get a mortgage with a default. However you usually have to go through a mortgage broker to find a lender who will accept you - it tends not to be the main high street lenders - and you will likely not get such a competitive mortgage rate.

So assuming you can you are best to wait until this default has been removed. Once its gone then nobody searching your file will be able to know it was ever there. As Soph suggests it worth checking your credit files before you apply (I have seen a couple of cases recently where equifax have taken an extra few days or so before the default has been removed - it should be 6years to the day but giving it a couple of extra weeks would be a good idea).

Bagster

thanks guys, that is helpful and reassuring to know

Bagster

just to clarify, is it 6 years from the date of the default on the credit file, or 6 years from when the debt is paid?

[Deleted User]

Bagster wrote: »

just to clarify, is it 6 years from the date of the default on the credit file, or 6 years from when the debt is paid?

Yes this is correct.

But I have found that it can take up to 8 weeks for anything on a credt file to be updated, so even after 6 years from the date the default was added to the credit file has passed, check your credit file before applying for credit to ensure that it has been updated.

Also, check your credit file with all three credit reference agencies to ensure they all hold acurate info on you.