*Moved* Advice for someone with "bumpy" credit history

Kms

Hi all, (moved this as i posted in wrong section but not sure how to delete other thread)

i'm after a bit of advice.. i know its not official advice but it may help me get an outlook on how i could prepare to apply for a mortgage maybe a year down the line..

The long and short of it is, during my younger days i was very foolish, got a credit card.. managed it for a few months then applied for a new one, forgot about the old one and started racking up debts on the new one too! got finance on a laptop and only made 50% of payments on that one, so years on, my credit file has been marked with defaults, these have been paid back now, one default from orange which becomes statute barred in a couple of months so have been advised to leave that one to "Drop-off" my file

So, Currently on my credit file i have 4 defaults, 3 partially settled with a Full and Final settlement figure agreed, so balances returned to zero, and the one from orange for £144.

i have 2 current accounts, one joint and one sole acc with an overdraft facility

i also have one credit card with 2500 limit, always used and paid in full each month

i have some savings, all payments currently and for the past 3-4 years are up to date,

annual salary 27k....

could anyone advise (Loosely) on what we could do perhaps in the next 12 months to put us in a better position?

Thanks in advance

Kris

Dave_Ham

You cannot improve other than getting very close to your Experian and Equifax and ensure you are on the electoral roll...

Your chances of success will be determined by the exact contents of the reports above (specifically the dates defaults listed) and more importantly your deposit as a % of the purchase price...

Lessbutbetter

I'm unfortunately in a similar situation, in that i would be refused a mortgage myself, however thankfully [and i'm not rubbing it in] i only have 1 CCJ dated from Jan 2010. I have another 3 or so years before i can even think about applying for a mortgage. I make sure i pay my credit card [only used for diesel, groceries] every month and also phone contract etc are all sorted too. I check my Experian every 6 months just to make sure everything is the way it should be. The only advice i could give is to pay all bills, direct debits etc on time and never miss a payment. Get yourself on the electoral roll as that will help too, although i have read cases where people have gained credit products, mortgages etc without being on it.
It's a pain in the backside but it's my way of learning not to make the same mistake again. I have never been very interested in owning my own house until recently. I'm 31 and i earn ok [35k] and have a 2 year old daughter so i'd like to start building a future for her. I guess i have alot of time to research into mortgages now and the best options for me when the time comes, and also put money aside for the hefty deposit!

Good luck

Dave_Ham

Lessbutbetter wrote: »

I'm unfortunately in a similar situation, in that i would be refused a mortgage myself, however thankfully [and i'm not rubbing it in] i only have 1 CCJ dated from Jan 2010. I have another 3 or so years before i can even think about applying for a mortgage. I make sure i pay my credit card [only used for diesel, groceries] every month and also phone contract etc are all sorted too. I check my Experian every 6 months just to make sure everything is the way it should be. The only advice i could give is to pay all bills, direct debits etc on time and never miss a payment. Get yourself on the electoral roll as that will help too, although i have read cases where people have gained credit products, mortgages etc without being on it.
It's a pain in the backside but it's my way of learning not to make the same mistake again. I have never been very interested in owning my own house until recently. I'm 31 and i earn ok [35k] and have a 2 year old daughter so i'd like to start building a future for her. I guess i have alot of time to research into mortgages now and the best options for me when the time comes, and also put money aside for the hefty deposit!

Good luck

So long as you have satisfied the CCJ and can raise a deposit, you may have options now...

All the best

Lessbutbetter

So you reckon i could get a mortgage albeit one with high high interest, if the CCJ is settled? It has not been settled yet, and is only for a few hundred pound. I read somewhere ages ago that if the CCJ gets paid before the six years, then it starts again from that date for another six years, but have recently found this out to be nonsense....thankfully.
Have you [Dave Ham] arranged mortgages for people in a similar position? If there was even a glimmer of hope for me before the end of the CCJ's six years [Jan 2016] then i'd be willing to give it a go.

Thanks for your information Dave.

Angry_Bear

Just to let you know, my OH has 2 CCJs from 2008 (for £3k + each!) and we just got our mortgage offer through last week - thanks in no small part to advice from the likes of Dave on here. We did have 25% deposit though.

Get a decent broker and be completely up front and you never know.

Oh, and the rate I got isn't bad at all!

Lessbutbetter

That's fantastic news. I guess the longer the CCJ is in the past, the less of an impact it will have on a decision. I fully understand that the more of a deposit you're capable of handing over then it leaves you a better chance of being successful too. I guess i'd need to be aiming at 15/20% at least with my circumstances. The thing is me and the wife will hopefully have another child in a couple of years time, so we will not be looking for a 1 bed flat if you know what i mean. The deposit i feel is incredibly important in all mortgage applications but especially so in my situation.

Thanks for everyones advice.

Dave_Ham

There are many variables involved, although deposit is a big one.

The CCJ definitely stays on for 6 years from the exact date placed, not when settled..

80% LTV is the trigger point for adverse credit, although it can be achieved at 85% and even 90% dependent upon the details.

I deal in the difficult cases day to day and embarrassingly for our industry, find solutions for clients who have seen 1, 2 or even 3 brokers/advisors before me! - sure I am not alone on this..

Just for my last bit of good news, these are not typically on silly high rates..

Get yourself your Experian and Equifax reports and put them in front of a decent broker and see what options you have..

All the best

mikey_bach

my friend has one default due to drop off October this year, and one settled default April next year is hoping to apply for a mortgage this week,
what are the chances please Dave...
A broker has said it is doable, what mortgages companies would consider I wouldnt think any mainstream.

Dave_Ham

mikey_bach wrote: »

my friend has one default due to drop off October this year, and one settled default April next year is hoping to apply for a mortgage this week,
what are the chances please Dave...
A broker has said it is doable, what mortgages companies would consider I wouldnt think any mainstream.

He definitely has a chance, variables below will affect it:

• Deposit %
• Income £ and employment type
• Exactly what is showing now on Experian and Equifax reports
• Core bank account provider
• Specific details of the defaults
• How experienced the broker he sees is..

There is a common misconception that if the bank is not in every highstreet, the rates will be sky high - this is not always the case..

Good luck

mikey_bach

thanks very helpful.
Is it true that if you go for a sub prime mortgage, sorry dont know what else to call them, and take a fixed rate say for two years,
at the end of it, is it easy to go main stream or does the above go against you.
I have read there may be a problem. At the end of the two year period the file will be ok so I know he wanted to go main stream or had hoped..