Credit scores, amount available, percentage used? I'm lost.

ballbagvw

Hi, I'm a newbie but not new to forums
I'm also not sure if I've posted in the correct forum, so, MODS, please feel free to move it
I have recently been unemployed and had a baby a few months prior (2 years ago) . I had some savings which paid the bills for a few months. Anyway, I spoke my mortgage lender (The Chelsea) and they were ok for a few months untill I found employment, they event got an agency to update and rewrite my CV.

Most of my other creditors were not so helpful (LloydsTSB, Egg, Tesco). Anyway, after tooing and froeing(sp) with them I managed to get in to smaller agreements.

I got myself back in employment and have been now for nearly 2 years.

The Chelsea have been great with us and we have been on an interest only mortgage for the last 20 months, so basically renting our own house. I have recently asked them if we can change it back to repayment and they want a whopping £967pcm :eek:, saying that they can't offer me a different product.

I have recently got my credit score which was 907 and pointing into the green 'good' segment.

What I don't understand is that, it also states that the percentage of my credit being used is 84% and I only have £391 available credit.
Who decides the amount I'm allowed and is it depending on my earnings and, what is the maximum credit score?

Also, should I try to get a mortgage from someone else but risk my credit score?

Any help would be greatly recieved so, thanks in advance.

Jay

Tixy

Hi ad welcome

The available credit figure is any unused credit on credit cards / overdrafts etc.
So if you have a limit of £1000 on a card and your balance per the credit report (which is usually a month out of date) is £600 then you have £400 available credit.

With regards to the % used - again that compares your debt balane to credit limits.

The amounts don't mean the amount you might be able to borrow from new lenders. Although they will take the data from your credit file into account as well as looking at your earnings, outgoings etc when considering whether or not to accept you for a particular item.

On your credit file on credit account section - do you have any defaults entered (from when you paid lower payments)? do you have any arrangement to pay marks? any missed payments?

On your mortgage entry on your credit file - does this show any arrangement to pay or anything?

Is the mortgage just in your name or a spouse as well (you mention an 'us')?

How much do you owe on your mortgage? and how much is your house worth? do you have any equity in the property?

ballbagvw

Hi Tixy, thanks for the swift reply

OK, I understand the available limit now ( I should've worked that out) lol.

I do have quite a few defaults with the Tesco loan but I have spoken to them regarding this, as they just stopped taking payments via direct debit and even they can't explain why. This is for an agreed payment of £70pcm. They said they'll sort it, but it still shows a multitude of red 8's :mad:

Egg (which is now Barclaycard) is showing lots of red circled 8's.
The Chelsea (mortgage) is all green 0's and some green U's.
Lloyds who I owe just under £15k to, are showing all red 8's, even though I'm in a £70pcm agreement with them and I haven't missed 1 payment.
Also Lloyds again, who we owe on an overdaft, we're paying £10pcm in an agreement are also all red 8's.

paulmapp8306

You need to speak to all parties.

If you fail to meet contractual obligations of a loan, but make an arrangement for lower payments (possibly with lower or no interest applied), then they have 2 options when recording the debt.

1. Place a default marker - as the debt (regardelss of the agreement) is not being met. Once a defauly has been p[laced, no further markers should be added - and the default will clear you history in 6 years. Defaults WILL severly affect your credit score though, and getting a mortgage woudl be very difficult if not impossible - and will be a high interest rate if you can get one.

2. Place "AP" markers on your account. This shows that the account has been defaulted on BUT you have an arrangement to pay (outside the original terms and conditions). This is how they differentiate from someone attemptiong to make payments, and someone who just walks away. its not as bad as a default, but worse than missed payments (though not as bad as red 8s all over the place!!). The whole history should be removed 6 years after the initial failure to meet contractual payments.

What they appear to be doing, ir recording 8 missed payments each month. This is NOT a true reflection of what is happening, and it needs addressing.

Finally - ignore tha actual score. Its meaningless. all credit companies evaluate tyheir own score, based on their own criterea. They take the HISTORY (ie how many debts, record of payments, any defaults, APs etc) but not the SCORE from Credit record companies.

dancingfairy

You can try and get an appointment with an independent adviser and get them to look through all the options with you. Be honest about your credit record though and they will advise you whether there is a product out there which is suitable for you or whether you would be best trying for a remortgage.
You can also try the mortgage boards on here for further advice.
My own thoughts (not qualified at all) is that you might not have the best credit record but that is perhaps worth one application (having researched one that would posisbly work for you)- one search probably won't do much damage but multiple ones would. If it doesn't work I would probably forget about it for 6 months, work on paying all my debts off as quickly as possible and on time each month and then maybe try again or try and save up to repay a chunk off the mortgage at some point.
Best of Luck
df

Tixy

I suspect given your credit file you have very little chance of remortgaging anywhere else.
The possible exception would be if you have a very low loan to value on your property - though as you have been paying interest only I imagine this is probably not the case.
But as df suggests - it could be worth a conversation with a mortgage broker with copies of your credit files.

You say the Chelsea said a repayment mortgage would be £967 -
what amount and APR have you been paying on interest only?
what APR is the repayment mortgage at £967? and over what term? If they cannot change the product you are on could they extend the term of your mortgage perhaps (depending on the existing term and your ages of course).

That said if your unsecured creditors are still charging you interest (and they may have agreed not to) then I'd probably focus on paying those off first and keeping the mortgage on interest only in the short term.

Given the level of your debts and the low level of repayments (it will take over 17years to pay off lloyds at the current rate) have you considerd speaking to one of the debt advice charities at all? Or it might be worth posting up a statement of affairs on here and seeing if people can make other suggestions that will help you. http://www.makesenseofcards.com/soacalc.html