Experian report holding up mortgage application

Chamone_2

Hi all,

I'm hoping that someone will have some advice as to how best to overcome a potentially very difficult situation.

I've just sold my house and am in the process of buying a new property. I did what I assumed was the right thing and have recently cleared every single scrap of credit card debt (almost £30K on various cards).

However, because I have done this all in the last couple of weeks, when applying for a mortgage last week I was declined, on the basis of 'undisclosed credit'. Sure enough, when checking my Experian report online it shows as 'poor' and all of that debt is still on my record.

This seems to me to be a very frustrating situation - my financial advisor can sit there looking at my income/outgoings (which are all fine) and credit card statements showing zero balance, yet a computer is telling her that I cannot get a mortgage.

Any advice would be appreciated as I now stand in the position of potentially losing the house of my dreams due to a computer error. :mad:

meer53

Credit files are usually updated once a month. Your financial advisor should have told you this.

kingstreet

The application should have been submitted with the details of the credit completed, with the "to be repaid on completion" box ticked for each. You should only leave off accounts which have been repaid more than four to six weeks earlier and even then, I still enter credit commitments with a "nil balance" so the lender can see what credit you have...

It is leaving them off the form which has resulted in the "undisclosed credit" accusation.

Most lenders ignore anything you say you will repay, except Abbey?Santander, who will simply assume you will run up the same debt again and will "tax" you the cost.

Chamone_2

I know, I wish I'd not been lured into making an offer on the house having not had this check done. They just looked at my finances and said the mortgage would be easy to have accepted.

Experian have said that they obtain information every 4 weeks from credit card companies....so there's a slim chance the system may be updated soon and we can move forward.

I've also called the card companies to let them know the situation. Some were extremely helpful and offered to contact Experian that same day to expedite the process, others (Barclaycard) were completely unmoving on the matter, saying simply "it's an automated process".

I'm sure that 30 years ago I'd be sat across the table from a bank manager who would be patting me on the back at this stage. Instead I feel like I'm at the mercy of a system that is so automated that it doesn't allow room for rational human thought.

kingstreet

Was your adviser aware of these recent debt repayments?

How did you find them? Recommendation? They should have thought about this...!

The accounts just needed declaring, that's all. Nothing to stop you applying, just ensure the form is properly completed.

Chamone_2

They were aware of the payments - absolutely, I was totally up front about that.

So, assuming the accounts are declared and they're marked as 'will be settled before completion', will my Experian score (currently showing as 652/Poor) not have any impact on the application then?

kingstreet

Lenders don't see your Experian score and I have no idea if this "poor" outlook is anything to do with these accounts you've paid-off or is representative of something else on your file.

If you were declined only for "undisclosed credit" and you now disclose that credit, I'd say your chances will improve, but I can't give you a guarantee.

What's the loan to value? Keeping some of the money back to get into a lower LTV band might have been a sensible move, if you're income-rich, capital poor.

Dave_Ham

Estate Agent mortgage advisor?

There are a good few lenders that are likely to accept you now, other things being equal as Kings says confirming you are to repay before completion (already done)

Some lenders will not be mad keen on reaching this figure, with or without being satisfied (Santander) and you relied upon your advisor knowing this.

There will be solutions now I would imagine..

Chamone_2

Thanks guys, feeling a little better about this now.

Yep, this is an estate agent mortgage advisor.

We were going for a 90% LTV, to leave some cash spare for fees/furniture at the other end. Anything 85% or less would mean more debt to pay fees...and I don't really want to go down that route if unless absolutely necessary.

meer53

You've applied for a mortgage stating that you have no outstanding credit. When the credit check is done, thats not what is seen which is why they've declined stating "undisclosed credit"

You need to reapply when your credit file shows all the accounts as paid. It's no good applying before then.

Dave_Ham

meer53 wrote: »

You've applied for a mortgage stating that you have no outstanding credit. When the credit check is done, thats not what is seen which is why they've declined stating "undisclosed credit"

You need to reapply when your credit file shows all the accounts as paid. It's no good applying before then.

This is incorrect.

You can apply today and confirm that the lending will be repaid pre completion, which is will be as obviously paid already.

Only Santander will not accept this and whilst many of the lenders may decline on the perceived level of unsecured debt, there are some which will not decline.

All the best