Default of £380 and Decision in Principle declined by HSBC

SASHAS27

My OH and I are first time buyers. We took a decision in principal with HSBC and it was declined. After ordering our credit reports I saw a default had been applied on my credit file from Argos.

At the end of 2009 and beginning of 2010 I was moving in between houses, each time I called Argos to have my address changed. When I moved to my permanent residence at the beginning of 2010 I called Argos and advised them of my new address. I was not told that I had a balance of £380 outstanding.

A few weeks later I received a letter from a debt agency, I called and made the payment straight away. My credit file is showing as follows:

Date of default: 10/04/2010
Date settled : 30/04/2010

I have written to Argos this week and requested as a gesture of good will the default be removed as in the 5 years previous to that I never made a late payment. So I'm waiting to hear from them now.

Aside from this default there are no other issues on my file, my partners file is also clean. We are looking to borrow £130,000 and have £25,000 (possibly £30,000) deposit.

I have been reading that HSBC criteria is very stringent... Any help or advice on which lenders are better to go to or any other advice with regards to obtaining a mortgage would be really helpful.

We are getting married next year and really thought we had saved and done all we could in order to obtain a mortgage.

Any advice on who the best lenders may be?

Thanking you All for reading this - Sasha

opinions4u

I was not told that I had a balance of £380 outstanding

While I think you're right in the way you are now dealing with Argos, you have to hold your hands up and admit a degree of financial negligence here.

You spent money, stopped getting statements and then "forgot" you owed money. Really?

You'll probably be able to get a decent broker to sort you out with a mortgage. Each extra 5% of deposit will open more doors. So keep saving.

kingstreet

How did you not know you owed £380? Presumably, you were receiving monthly statements, then you weren't?

Did you miss three or more monthly payments on the credit agreement in question?

You are unlikely to have this default removed because of the reason you have stated. You would need to prove it was registered in error and I'm not sure you'll be able to do that.

Still, it's worth a try.

It's time to find a good whole market or independent broker. Before you go, obtain copies of your credit files from all three CRAs. The paper versions at £2 each will do. You don't need to sign up for online schemes which tell you your inside leg measurement. Take the files to your broker and establish exactly what information is there and on which file.

Equifax

https://www.econsumer.equifax.co.uk/consumer/uk/gb_consumerletter.ehtml

Experian

https://secure.wiseconsumer.uk.experian.com/wiseconsumer/secure_index.html?data=00

CallCredit

https://www.callcredit.co.uk/stat-report-online/index.php?action=register_display&tpl=regPurchase

In the interim, do not make any more speculative applications directly to lenders. You have one wasted credit search.

At a loan to value of 83%, you have a better chance than at 90%. You may have to get to 80% to get across the line.

SASHAS27

Thank you...You are right, there was some negligence from my side but moving homes twice in three months was stressful. And from my part it was a genuine error.


Also I settled the default straight away and with the default only being £380 and the rest of my file clean I'm still hopeful for a mortgage.

However my main concern is if Argos don't remove the default, going forward both my OH and I wanted some advice on where to go from here.

Will saving a bigger deposit be a better option or would going to another lender who aren't as strict in their criteria as HSBC be more of an option.

Thanking you.

ACG

I doubt argos will remove the default.

Forget HSBC, i dont think they will offer you a mortgage, i wouldnt worry as there will be lenders who will - the rates wont be as good as HSBCs but you will be able to get a mortgage based on the info you have given.

I would speak to a Whole of market or independent mortgage advisor.

SASHAS27

Thanks ACG,

I am thinking the same. Will get in touch with a mortgage broker and take it from there.

HSBC said because the default was within the last three years they wouldn't offer me anything, however if it had been more than three years then the underwriters would have "taken a view"

I will be contacting a broker today... Just hoping there is a lender out there who will be able to help.

Thrugelmir

SASHAS27 wrote: »

At the end of 2009 and beginning of 2010 I was moving in between houses, each time I called Argos to have my address changed. When I moved to my permanent residence at the beginning of 2010 I called Argos and advised them of my new address. I was not told that I had a balance of £380 outstanding.

The onus was on you to provide an address at which you could receive communications.

Its worth setting up a direct debit to ensure that the minimum balance is at least paid every month.

Dave_Ham

As said on here, the content on your Experian, Equifax and Call Credit will be crucial and the date registered.

Forget what HSBC advisor told you, you will not achieve a HSBC mortgage with a default on your file - even if over 3 years

You will not get through an automated credit score with a traditional, high street bank.

You either engage a decent broker, ensure they are suitably qualified to solve this issue for you. An inexperienced broker will struggle to nail this, you should not pay much of a premium and you may end up at a Building Society in any case where the rates are comparable to high street (maybe no quite HSBC..)

In the meantime, save like mad as 20% deposit may open the door...

All the best