Help..late payment charges caused my mortgage app to be declined!!!

LadyLondon2013

My partner and I have applied for a new joint mortgage however, this has been declined on the basis of my credit rating. My partner has an excellent credit rating however I have 2 late credit card payments for 2 subsequent months showing within the last 12 months which I have disputed and the credit card services team have sent a request to Credit expert for this to be cleared from my credit report however, I understand this can take up to a month.

Prior to that my report shows 1 late payment in 2011, 1 in 2009 and 1 in 2008 they were settled in full within days however they obviously show up on my credit report. They were simply due to me not setting up a direct debit and forgetting my billing date.....very stupid, I know! They all show up as 1's

Will this affect my ability to get a mortgage? Is there anything I can do to help the situation? Should my partner reapply alone? Will the declined mortgage application make things worse on our credit reports?

Any advice would be great!

The_Boss

Yes it will affect it - the lenders do not see how late a payment was or whether it was paid within a few days, just these blemishes. Your report will show a credit search by the lender but it will not indicate whether you were successful in applying for the product.

When you say 'subsequent' months, do you mean consecutive months? Out of interest on what grounds did you dispute them? As things stand, 5 late payments on a report shows reliability problems, particularly if you meant consecutive. Could point to money problems also. But there could be other items on your report that also contribute, such as having levelsbof significant debt on credit cards too.

If your partner applies alone then will you be able to get the amount you need without factoring in your salary?

LadyLondon2013

HI,

Yes, I mean consecutive months. I have disputed them both as I did indeed make the payments online and in time however I had been issued with a new credit card (the new number was different) and the banks system did not recognise the new card number in the payment reference and bounced my credit card payment back to my current account. I was not alerted until I found the late payment charge on my statement which I disputed and this was refunded, I was assured the credit card company had corrected the problem but the following month the same thing happened so I made a manual payment instead over the phone... I had no idea these 2 things would end up on my credit report!

What about the late payments in 2011, 2009 and 2008? Will these also affect my application?

Thanks

The_Boss

LadyLondon2013 wrote: »

HI,

Yes, I mean consecutive months. I have disputed them both as I did indeed make the payments online and in time however I had been issued with a new credit card (the new number was different) and the banks system did not recognise the new card number in the payment reference and bounced my credit card payment back to my current account. I was not alerted until I found the late payment charge on my statement which I disputed and this was refunded, I was assured the credit card company had corrected the problem but the following month the same thing happened so I made a manual payment instead over the phone... I had no idea these 2 things would end up on my credit report!

What about the late payments in 2011, 2009 and 2008? Will these also affect my application?

Thanks

If you can see them on your account, then yes. The current total stands at 5.
Admittedly I thought only the past 36 months of account information was visible/used so the last two wouldn't show. Were these accounts with late payments closed?

Also what are your credit card limits and balances on one them? This could affect the decision also. For example, I was conditionally offered a mortgage on the basis that I paid off £5k from a card to clear it and then provided proof.

Voyager2002

Since your late payments were a result of failures by the lender, and as a result the charges were refunded, you should be able to ask this lender to remove the late payment markers from your record.

As for the declined mortgage application, I suggest that you appeal: explain that the five consecutive late payments (a red flag if anything is!) resulted from the lender's fault, and provide evidence that the late payment charges were refunded.

Buzby

A refund of charge does not mean the slate is wiped - as you discovered. There is no automatic right to this either because, as you readily admit, the payment did not reach the account it supposed to. The refund of charge is not an admission of no error, but an appreciation that there were mitigating circumstances - nothing more.

Lenders take differing views, some only look for defaults, whilst others are really picky and look for any reason and whilst a late payment marker will show you paid up only after the expected date, they will look upon it as if it was a crime of the first magnitude.

Your right to removal is limited. If the data is correct, then reasons why are immaterial. You can add a DPA mandated 'Notice of Correction', nut this is just a sop to the consumer. Auto-scoring systems don't look at these and only a manual search will show it. The potential lender does not have to read, believe or take the slightest notice of it.

The_Boss

Voyager2002 wrote: »

Since your late payments were a result of failures by the lender, and as a result the charges were refunded, you should be able to ask this lender to remove the late payment markers from your record.

As for the declined mortgage application, I suggest that you appeal: explain that the five consecutive late payments (a red flag if anything is!) resulted from the lender's fault, and provide evidence that the late payment charges were refunded.

The OP has explained that the 3 of the 5 were because they forgot and paid late though.

LadyLondon2013

Reply to te Boss: Hi, I am due to speak to the Credit card Account services team tomorrow so they can make a final decision on accepting a Bank error and requesting the removal of the 2 most recent late payment markers in April and May 2012. I have no balances outstanding on any credit cards and our current mortgage payments have always been on time and we have not missed any. Aside from the late payment in July 2011 and one in 2009 and 2008 which as I explained were oversights, there is nothing else I can see on my credit report that is adverse. The 2008 and 2009 account has not been closed the card expired and I was sent a credit card with anew number which appears under a new profile on the credit report. Is there anything more I can do to improve this situation?

My partner can apply for a mortgage alone but what are the pros and cons for us in doing this? I am a joint owner of our current property and will be of the next so does the mortgage have to be in both our names?

Thanks for all the feedback so far !

izools

Give you owe nothing on your credit cards your debt to limit ratio will put you in very good stead, standing currently at 0%. Excellent.

If your late payments from last year are removed, I wouldn't expect there to be a problem. The prior late payments are old, and you never fell more than one month behind.

If however your credit card company decides that the late payments from 2012 should remain on your credit file, I would suggest you wait until your most recent missed payment is at least 12 months old before applying for a mortgage.

And yes, for you to be joint owners you have to be joint borrowers.

LadyLondon2013

Izools: Thank you so much for the feedback :A....this is helpful and thankfully today the credit card company have accepted these 2 late payments in 2012 as a bank error...yipppee! I understand these take 2 weeks to be cleared from my profile etc and I will receive a letter confirming this from them. I will however chase the bank regularly until this is done as we have a meeting with the Bank Mortgage adviser next week to present our current situation and find a way forward. Fingers crossed!!!

izools

It can actually take six to eight weeks for the update to take effect - so please don't apply for any mortgages until you can see for yourself that the late payments have been removed from the credit reference agency that that lender uses.

Keep up to date with Equifax and Experian, you might find that your credit card company remove the late markers from experian but not equifax (or vice versa) and need another letter from you to get their rear in to gear.

Very common.

Good luck!