Do lenders have different adverse criteria for different types of credit?

NeoVR2k6

One for the brokers amongst us:

Do Mortgage Lenders "categorise" lines of credit a potential borrower has? Specifically in the case of adverse credit, lates, defaults etc.

IE does a lender view a previous late payment on a telephone bill as bad as a late payment on a mortgage/rent etc.

Ive been doing a bit of googling trying to get my head around general criteria for both the high-street lenders and the more specialist lenders and have noticed for those who give high-level outlines of their basic acceptability criteria online that some specifically mention about arrears/lates on mortgages or tenancy agreements but not "general" consumer credit, some mention all credit agreements and some even say telecomms are not included.

Any insight would be appreciated

vectistim

Yes.
In a rough order:
Late payments
Defaults
Satisfied CCJ
Unsatisfied CCJ
IVA

With various other options in between. HSBC currently seem only interested in the perfectly squeaky clean. Other high street lenders may be a little bit more flexible.
For adverse cases a broker can identify appropriate products from appropriate lenders. Some specialists will have a range of products for different situations - such options will be far fewer and less evident on the high street.

kingstreet

Lenders keep the methodology around their credit scoring secret. Other than educated guesses, it's difficult to suggest how something will impact with a particular lender, unless it's a really obvious issue.

It's all about loan to value. The relative importance of an issue is directly related to the size of the loan to value. A single late payment on a credit card may mean nothing at 60%, but be a deal breaker for some lenders at 90%.

NeoVR2k6

kingstreet wrote: »

Lenders keep the methodology around their credit scoring secret. Other than educated guesses, it's difficult to suggest how something will impact with a particular lender, unless it's a really obvious issue.

It's all about loan to value. The relative importance of an issue is directly related to the size of the loan to value. A single late payment on a credit card may mean nothing at 60%, but be a deal breaker for some lenders at 90%.

I understand that with the voodoo that is credit scoring - however most have criteria for automatic decline do they not.. like missed payment in last 12 months, no CCJ in last 3 years etc etc

kingstreet

Some do give a fairly limited guide like that, yes. Others tell you nothing.

andy213

I have just been to hell and back to get a house as what I thought was a decent credit rating was in fact not up to it , but I did it, and here's what I can pass on from the experience

1. Experian equifax callcredit - loathsome companies with far too much power run the shop - if you apply online or on the phone , a computer will read info sent from one or all of these and if you are not up to it, write you off there and then, far before a person gets your good points in front of them on a desk .

2. not only that every time you try, the agencies dock your score, it is a revolving cycle of rejection leading to rejection -do it once do it right, apply a few times with extreme caution to lenders you think will say yes, whatever you do don't apply willy nilly or to lenders you think will say no, they might say no for other companies too

3. play the game with these foul agencies- this bit made me sick as I RESENT paying for a file of dirt kept on me by these odious agencies, this isn't freedom of information, it's outright corruption, but for a month, do it, see why they're holding the info they do on you, as chances are they are wrong, this isn't your fault, but they expect YOU to sort it out, if you don't and it's a serious mistake, there goes your mortgage.

4. keep credit card debts at less than 50% if you can , ideally under 30%, spreading out debt is fine. but I had one card only small limit of £750 on about £600 because I wanted the payment in a high interest account making me cash, good tip but wrong thing to do with the dreaded argos card, I thought £600 was easy I could pay it no problem but it was the percentage of total limit that shafted me. I paid it off in full, not worth it. My rating advanced 100 points at the witchcraft sites as a result, even though I earn enough to easilly handle that debt and have cards with far higher limits they're about percentages.

5 lates aren't important unless you have loads of them, CCJ's and defaults are super important, they at least must be satisifed and show settled for beyond 12 months , most say 3-4 years

6 LTV lowers the hoop your credit score has to jump through to get accepted, 10% in these depressed times and you have to be mr perfect from the second you were born, 15% room for some bad behaviour in the not too recent past 20% more room still, 25% even more room 50% prolly do it on a cashcard account and a wonga.com addiction

......if you have any spare cash keep it to pay off bills that might matter, if you have one card that's high percentage wise, pay it but never close old accounts, then they'll say you have too recent credit, best to pay it to zero and leave it as dormant

Experian, Equifax Callcredit, in particular experian are utter scum and crooks. they have an awesome power over peoples lives they get everything wrong and they charge you in time and money to get it right, the consequences of not doing so are , but are not limited to, a mortgage refusal. I have written to no10 about this not that it'll make a difference, as they have far too much power, and there is no freedom of information, they charge you for it, there is no innocent until proven guilty, in their eyes you are guilty, it's their kangaroo court and it is you that must do the legwork to prove yourself innocent, especially if you have a common surname. I cannot say how vile experian are, what I can say is that I managed to get the house, but am unsure which I will savour more - getting the keys to my new place, or cancelling my membership in full, forever to the odious creditexpert. com

crooks.

Thrugelmir

andy213 wrote: »

I have just been to hell and back to get a house as what I thought was a decent credit rating was in fact not up to it , but I did it, and here's what I can pass on from the experience

1. Experian equifax callcredit - loathsome companies with far too much power run the shop - if you apply online or on the phone , a computer will read info sent from one or all of these and if you are not up to it, write you off there and then, far before a person gets your good points in front of them on a desk .

2. not only that every time you try, the agencies dock your score, it is a revolving cycle of rejection leading to rejection -do it once do it right, apply a few times with extreme caution to lenders you think will say yes, whatever you do don't apply willy nilly or to lenders you think will say no, they might say no for other companies too

3. play the game with these foul agencies- this bit made me sick as I RESENT paying for a file of dirt kept on me by these odious agencies, this isn't freedom of information, it's outright corruption, but for a month, do it, see why they're holding the info they do on you, as chances are they are wrong, this isn't your fault, but they expect YOU to sort it out, if you don't and it's a serious mistake, there goes your mortgage.

4. keep credit card debts at less than 50% if you can , ideally under 30%, spreading out debt is fine. but I had one card only small limit of £750 on about £600 because I wanted the payment in a high interest account making me cash, good tip but wrong thing to do with the dreaded argos card, I thought £600 was easy I could pay it no problem but it was the percentage of total limit that shafted me. I paid it off in full, not worth it. My rating advanced 100 points at the witchcraft sites as a result, even though I earn enough to easilly handle that debt and have cards with far higher limits they're about percentages.

5 lates aren't important unless you have loads of them, CCJ's and defaults are super important, they at least must be satisifed and show settled for beyond 12 months , most say 3-4 years

6 LTV lowers the hoop your credit score has to jump through to get accepted, 10% in these depressed times and you have to be mr perfect from the second you were born, 15% room for some bad behaviour in the not too recent past 20% more room still, 25% even more room 50% prolly do it on a cashcard account and a wonga.com addiction

......if you have any spare cash keep it to pay off bills that might matter, if you have one card that's high percentage wise, pay it but never close old accounts, then they'll say you have too recent credit, best to pay it to zero and leave it as dormant

Experian, Equifax Callcredit, in particular experian are utter scum and crooks. they have an awesome power over peoples lives they get everything wrong and they charge you in time and money to get it right, the consequences of not doing so are , but are not limited to, a mortgage refusal. I have written to no10 about this not that it'll make a difference, as they have far too much power, and there is no freedom of information, they charge you for it, there is no innocent until proven guilty, in their eyes you are guilty, it's their kangaroo court and it is you that must do the legwork to prove yourself innocent, especially if you have a common surname. I cannot say how vile experian are, what I can say is that I managed to get the house, but am unsure which I will savour more - getting the keys to my new place, or cancelling my membership in full, forever to the odious creditexpert. com

crooks.

The lesson from which I guess is to keep your personal financial affairs in order.

Not sure why are you blaming the agencies. When it's business that registers the data for the benefit of other organisations not individuals.

NeoVR2k6

andy213 wrote: »

4. keep credit card debts at less than 50% if you can , ideally under 30%, spreading out debt is fine. but I had one card only small limit of £750 on about £600 because I wanted the payment in a high interest account making me cash, good tip but wrong thing to do with the dreaded argos card, I thought £600 was easy I could pay it no problem but it was the percentage of total limit that shafted me. I paid it off in full, not worth it. My rating advanced 100 points at the witchcraft sites as a result, even though I earn enough to easilly handle that debt and have cards with far higher limits they're about percentages.

Some interesting comments there lol.

So given my situation (got knocked back for a mortgage for a newly added £10 late payment) - even though im disputing that so i can appeal to the lender, who will more likely not change their mind, i might be shafted anyway if i have to go look somewhere else for a mortgage because the lender has done four searches on experian for a single application? - CRA footprint rule based solely on number of searches or are they intelligent enough to narrow it down to searches by different lenders?

Also i have some Creditcard debt but its all piled onto one card (0% BT) and although it makes up for a high % of that card, its less than 30% of my max available credit when my "purchasing" card is taken into account. is this likely to hurt too?

Obviously i know that the mythical "credit rating" number is just that.. a pointless number

Thrugelmir

NeoVR2k6 wrote: »

Also i have some Creditcard debt but its all piled onto one card (0% BT) and although it makes up for a high % of that card, its less than 30% of my max available credit when my "purchasing" card is taken into account. is this likely to hurt too?

Debt is debt. All has to be repaid. Means that a potential borrower is financially weaker and more likely to be distressed by an unexpected event.

NeoVR2k6

Thrugelmir wrote: »

Debt is debt. All has to be repaid. Means that a potential borrower is financially weaker and more likely to be distressed by an unexpected event.

Damned if you do.... Damned if you dont.. good innit :mad:

Thrugelmir

NeoVR2k6 wrote: »

Damned if you do.... Damned if you dont.. good innit :mad:

Common sense really. Savings and debt do not sit in different pots.