Mortgage Refused Despite Excellent Credit Rating

Mind_the_Gap

A family friend was told last week she could have a mortgage by one of the big banks, then informed today that it had been rejected. She went into her local branch where the manager said he couldn't understand it and said he would appeal. He appealed and it came back again as rejected on the grounds of her credit rating (which is 970/1000 accoridng to Experion, but the bank wouldn't reveal the criteria they used). She has never been in debt except for a student loan, never exceeded authorised overdraft, always pays bills on time.

She feels very frustrated as the mortgage repayments were well within her means and she could put down a 30% deposit on the property she wanted to buy (first time buyer, after a loan of about £100k I think).

Now she thinks that if she approaches other lenders, they'll ask whether she has ever had a mortgage refused and the fact that she has (albeit inexplicably) will count against her.

Any advice? Thanks in advance.

Simon_gloster

Tell your friend excellent credit scores mean very little in todays climate.

The score cards used by lenders are highly sophisticated and use information submitted as well as linking to experian.

Having 1000 score with 50% deposit on £2m per annum but the deposit coming from a vendor will decline in most cases, so something as trivial as this can impact lending decisions.

opinions4u

Tell her to:

1. Stop giving Experian money for their random number generator service.

2. See a mortgage broker. She'll get sorted out somewhere.

MoneySaverLog

opinions4u wrote: »

1. Stop giving Experian money for their random number generator service.

I'll give you a score too it's 999. There you go, it's just as meaningless as the Experian Credit Score. That will be £14.99 please. Oh if you stay with us I'll give you another 999 you can scream about next month.

Off to the lender you go with a top credit score, and then the bombshell.... "sorry sir, you failed our credit scoring criteria - Bog off".

But Experian gave me their highest 999 score, you explain, how can I fail?

Because we are lending you the money NOT Experian the adviser will say :rotfl::rotfl::rotfl: We have our own scoring criteria, and we're not telling you what it is either. :eek:

Inforapennyinforapound

Just for the record i have just gone through a traumatic time with Santander trying to do a transfer of equity (removing my ex from the mortgage).

I too have a good rating and income well exceeds mortgage plus loads of equity.I was refused because i had a default of £90 5 yrs ago (settled) and it showed on Experian records..........i was not amused!

So its goodbye Santander and hello halifax.....i remortgaged with them without a problem.

As an aside the bank should tell the person on appeal the actual reason for a refusal(they told me that it was this default)

opinions4u

As an aside the bank should tell the person on appeal the actual reason for a refusal(they told me that it was this default)

Although the reason can teach the applicant how to commit fraud.

Dave_Ham

So the information you probably wanted is:

Get them to print off both their Experian and Equifax reports and put them in front of someone who knows what they are doing.

The scores are as stated worthless, but the credit files themselves interpreted in an appropriate way are crucial.

The scores are there to upgrade you from a £2 statutory spend (which is the ones you need to get) to the £15 a month special and the commentary is the same.

Good luck (for your friend)

Mind_the_Gap

Thank you for all the explanations as to why her Experian credit score isn't significant.

Please does anyone have any advice as to where she goes from here?

I don 't know her exact income, but from her profession (she's a young lawyer) it is going to be at least £30k and rising.

Dave_Ham

Mind_the_Gap wrote: »

Thank you for all the explanations as to why her Experian credit score isn't significant.

Please does anyone have any advice as to where she goes from here?

I don 't know her exact income, but from her profession (she's a young lawyer) it is going to be at least £30k and rising.

Pretty much exactly what I said above: get her Experian and Equifax reports (THe £2 ones) and then put them in front of a mortgage broker or someone who knows how to interpret them.

There will be a reason in there, just need to ascertain what it is.

sammyjammy

Does she have any credit at all? Never had a credit card? This can go against her when being credit checked as they cannot verify that she manages credit well and repays her debts.

Has she actually found a house or is she just trying to find out how much she could borrow? If the latter then she could get a credit card, use it for her purchases and pay it off in full at the end of the month and then reapply in a few months time.

DVardysShadow

sammyjammy wrote: »

Does she have any credit at all? Never had a credit card? This can go against her when being credit checked as they cannot verify that she manages credit well and repays her debts.

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