Help, 5 late payments on credit card. Will mortgage app be ok?

bigedy33

I'm about to apply for a joint mortgage with my partner who has a very good credit rating. I however have 5 late credit card payments, they were settled within days however they obviously show up on my credit report. They were simply due to me not setting up a direct debit and forgetting my billing date. Very very stupid I know.
I'm going to clear one of the cards completely, and close the account, leaving only one card still with debt on it.
Will this affect my ability to get a mortgage? Is there anything I can do to help the situation?
Any a dive would be great thanks

Vortex566

Did they occur in the last 12 months? When you say five missed payments do you mean on five different cards, or on the same card?

dunstonh

Lenders are refusing with one late payment. 5 is really pushing it. You would have to stack up well in other areas to compensate (larger deposit, not pushing the income limits).

Timescale is important. The more recent, the worse it is.

bigedy33

Yes they were all in the last 8 months. Like I say they were all paid within a day or two of the due date, though I don't think this matters does it?
We will have a deposit of 25-30%. However we would be looking to push the earnings limits.
Thanks for your advice

jamesd

bigedy33 wrote: »

I'm going to clear one of the cards completely, and close the account

[STRIKE]A credit report shows the last three years of payment history for an account. A closed account stays around for six years from closure and the last three years shown for it are th three just before it was closed.

If you keep the card open for three more years all of the late payments will leave your credit record. Then you can close it.

If you close the card now those last three years will be visible for the next six years instead of only the next three at most.[/STRIKE]

bigedy33 wrote: »

Will this affect my ability to get a mortgage?

Yes. Any isn't great, five looks like a bad habit. The effect is reduced as time passes and vanishes as each drops off your credit report.

bigedy33 wrote: »

Is there anything I can do to help the situation?

[STRIKE]Keep the account open but with a low credit limit so the late payments go away more quickly,[/STRIKE] ensure that you have at least minimum payment direct debits set up on all of your accounts so it won't happen again.

If you have minimum payments set up and only make them, also set up a standing order for £1. That will prevent a "minimum payment only" flag being shown on your credit report. It can be taken as a sign of inability to pay more.

If you don't have any joint accounts of any sort with your partner the setting up of a join mortgage account will harm your partner's credit score as well as your own because your report would become available to those checking on your partner. It's worth considering whether a joint mortgage will help or hurt your chance of getting a property. Your partner would probably get a higher amount of borrowing income multiple allowed without you than with you but that might not be enough to compensate for not being able to claim your income. If you already have a joint account it's too late to consider this - you're already financial associates.

If you aren't already financial associates it's worth a chat with a mortgage broker to help to sort out whether a single or joint application will be best.

tyler80

I have read somewhere that late payments don't get marked as late in credit reference terms until 30 days plus.

I've not got a reliable source for that though.

GMS

bigedy33 wrote: »

Yes they were all in the last 8 months. Like I say they were all paid within a day or two of the due date, though I don't think this matters does it?
We will have a deposit of 25-30%. However we would be looking to push the earnings limits.
Thanks for your advice

Have you obtained copies of your credit reports? Does it show?

If so is it showing as 11111 or 12345?

markalanious

jamesd wrote: »

A credit report shows the last three years of payment history for an account. A closed account stays around for six years from closure and the last three years shown for it are th three just before it was closed.

If you keep the card open for three more years all of the late payments will leave your credit record. Then you can close it.

If you close the card now those last three years will be visible for the next six years instead of only the next three at most.

Is this correct? I only ask because on my credit report (from Equifax) it shows data on credit right back to 2003.

neverdespairgirl

I have one late (not missed) payment on a credit card from 2006. First Direct decided they didn't care about that, although they did say they might have hesitated had it not been a long time ago.

bigedy33

GMS wrote: »

Have you obtained copies of your credit reports? Does it show?

If so is it showing as 11111 or 12345?

Yes i got my credit reprt and all of them are 1s. I guess this makes it slightly better.
I'm afraid we have a joint account so I'm already linked to my partner. Only applying in her name Isn't an option I'm afraid, I earn 35k she earns 25k and we have approx 45k equity in our current house and would be looking to borrow 160k.
I suppose if this is going to rule me out my next question would be, is it worth me applying or would the risk of a rejection count mean it's not worth applying and having a rejection in my credit report?
Thanks again everyone

jamesd

markalanious, it was a relayed suggestion from one of the credit reporting agencies, I don't recall which.

Checking Experian I see "Every credit account includes a status history that shows how payments were made. The status history covers payments made during the past three years. The most recent payment appears first" so that may be the one it was referring to.

Judging from your experience with Equifax it doesn't apply there.

I see that Experian is planning to increase from 36 months to 72 months soon in their CAIS system, so the whole six years will be visible regardless of whether it's closed or not.