Will I have a credit problem?

sightlesseyes

I am just starting to look at buying my first house, I have had three lenders give me mortgage quotes, but the one I've just rung says that there's a credit check on each one (which I knew) and that too many credit checks gives you a bad record (which I didn't know), she said four would be a bad record.
So my questions are:
I have three credit checks on my record - am I now a bad risk?
How am I supposed to get the most competitive deal without getting more credit checks on my file?
Will an independant mortgage broker at an estate agent's be impartial enough to give me a good deal?

Cara79

Hey there!

Yes, I'm afraid too many credit checks do have an adverse effect. This is because lenders can see that your credit history has been checked, but it does not state why and whether it is good/bad. Therefore, it looks as though you have applied for lots of credit.

In order to shop around, the best thing to do is see a whole of market adviser, as they will be able to find about your salaries, history etc etc, and can then research the market on your behalf, decide who would be best to approach and then apply. Therefore one check would be carried out.

By going to each lender and asking for an agreement in principal, each time you do this, it creates a mark on your file. They should have told you this at the time.

By using a mortgage consultant at an Estate Agents, they may well be tied to a panel. You may want to check this, but also check that they can also go "off panel".

Have you already seen an adviser or just gone direct to the lenders?

sightlesseyes

I've just gone direct to lenders so far, but I'll stop that right away! Thanks Cara!

They told me that they'd be doing a credit check but only this last one said it could have an adverse effect. The others made it all sound very routine. I actually was under the impression that these little checks were better than a full credit search!

The bloke that showed me round one of the houses I looked at is a mortgage adviser, he did mention panels but not sure about off-panel, so I'll check on that. I said to him that I found it all too confusing and he simply said "I arrange mortgages day in, day out and I find it simple because it's my job. If I came and did your job for a day, my head would be swimming too!" Amen to that!

Merry Christmas all!

jamesd

There are two significant types of credit checking for. One is the full credit search, which implies that money is being asked for. The other is a quotation search, which doesn't have quite that implication. You should ask that lenders do only quotation searches until you have selected the lender you want, then that one does need to do a full credit search. One mortgage lender does do an unspecified search when doing an agreement in principle, instead of either of these two types, but that's really unusual.

If you're worried about whether you'll qualify for a particular lender, ask to discuss their lending criteria and specify that you do not want a search done. Then you should be able to discuss whether your general sort of situation is acceptable to their underwriters. I've done this myself since there's one non-credit aspect of my own situation that's not as ideally desired by lenders.

Mortgage brokers are good to avoid this. Do be aware that the mortgage brokers in some of the biggest name estate agents do have quite a restricted set of lenders. Don't necessarily avoid them, but it is worth having a word with another one, not in an estate agent, as a check.