FTB in London, weird credit "score"

csquare_2

Hi all

I am looking at buying a studio early 2014 in London.

I have about £15k saved at the moment and in a year's time I'll likely have about £20k saved.

This should be adequate to put down a 10-15% deposit on a studio in London.

Anyway, for research purposes I performed a credit report search and my "score" was something like 289 :eek:

I noticed a few searches had been performed under my name, one for the new job I accepted and things like that. Anyway...I had made a few silly late payments on mobile phone contracts, overdrafts and eBay account payments between 2007-09 when I was a student and am wondering if this would adversely affect my mortgage application which will be made in 2014?

I've been trawling these forums in search of similar threads, found a few similar ones but nothing this specific.

Basically, would I be best going through a broker for a mortgage as to the high street providers? I don't intend on performing any more credit searches until 2014.

Do mortgage providers/brokers look at your "score" or humanly assess your report by actually looking at it, or is it all done by a computer?!

I currently don't have any loans (bar a £4k student loan), not a CCJ/credit card type of person and don't have anything financed except a contract phone.

I would consider myself pretty "small fry" in terms of the fact that I missed a few payments 4-6 years ago but could this adversely affect my chances of getting a mortgage? Simply by being a careless (and poor!) student at the time?

I'm completely financially solvent, earn 26k and haven't missed a bill payment for years.

Any ideas?

Thanks & regards

kloana

csquare wrote: »

Anyway...I had made a few silly late payments on mobile phone contracts, overdrafts and eBay account payments between 2007-09 when I was a student and am wondering if this would adversely affect my mortgage application which will be made in 2014?

Allow 6 full years from your last misgiving (missed/late payment, etc.) before you'll be absolutely 'clean'.

However, you just say late payments. Is that the case across the board? No accounts actually in default? If it's just missed/late payments, dating back several years, you're unlikely to be barred from the mortgage market entirely, on this information alone. Defaults (and worse) are a different story.

I currently don't have any loans (bar a £4k student loan), not a CCJ/credit card type of person and don't have anything financed except a contract phone.

If your student loan is a proper student loan (from Student Finance), it won't show on your credit file. Not sure what you mean by not being a CCJ (county court judgement) person? Though if you don't have any CCJs, that's obviously good news!

I'm completely financially solvent, earn 26k and haven't missed a bill payment for years.

You wouldn't be able to borrow the c.£180k you seem to be looking for (?), as that'd be almost 7 times your salary. Expect to be able to borrow around half of that.

csquare_2

Hiya,

Thanks for such a detailed reply.

Basically, I am looking to borrow around £90-100k in a mortgage as the studio flats I am looking for are around that sort of price. The mortgage "calculators" on a lot of websites typically say I can borrow around that amount although it's no given that I'll be awarded that amount, it's purely based on the salary I input into the website.

I didn't mention anywhere that I'd be looking at borrowing £180k

It is a proper student loan FYI

Yeah the missed payments are basically either being a mobile contract unpaid for a month, an eBay account fee been passed on to a debt collector or my old overdraft being charged and me being unable to pay it.

I was just a bit down in the dumps when I saw my credit score and thought I was in effect "barred" from the mortgage scene. Considering seeing posts on MSE and people being potentially worse scenarios than myself getting on (or already on) the housing ladder then I am beginning to calm down now.

I don't foresee going down the high street lender route though.

Regards

kloana

csquare wrote: »

Basically, I am looking to borrow around £90-100k in a mortgage as the studio flats I am looking for are around that sort of price. The mortgage "calculators" on a lot of websites typically say I can borrow around that amount although it's no given that I'll be awarded that amount, it's purely based on the salary I input into the website.

Sorry, with you saying you'd have 10-15% deposit with your 20k, I took it to mean you'd be looking at properties around the 200k mark (top end)! Borrowing 90-100k much more realistic on a 26k salary

Yeah the missed payments are basically either being a mobile contract unpaid for a month, an eBay account fee been passed on to a debt collector or my old overdraft being charged and me being unable to pay it.

Did the old eBay account go into default (for it to be passed on to a DCA?). And what's your overdraft/overdrawn situation these days?

I was just a bit down in the dumps when I saw my credit score and thought I was in effect "barred" from the mortgage scene.

The credit score - the random number they throw at you - doesn't matter.

I don't foresee going down the high street lender route though.

I don't see any reason as to why not. Go to a broker and they may very well suggest a very 'high street' mortgage anyway. But you'd need to check on whether the eBay account actually went into default. If so, what date is registered as the date of default (add 6 years to this), and did you repay it in full?

Other useful things you can do right now, assuming you haven't already...

...Get on the voters roll. Cut down (ideally completely clear) any outstanding overdraft balance. Minimise general overdraft usage, or even better, try not to use it at all.

You could also look at building a credit history (just mobile phone contracts alone is a bit rubbish for this purpose) by taking out a small credit card. Pay it off in full every month, and you'll not only pay zero interest (regardless of the APR attached to the card), but will also demonstrate your ability to manage credit/money.

csquare_2

Hi again

Thanks again for another detailed reply.

Yes I'm realistically looking at the ~£100k mark for studio properties in London

I had a look at my credit report although I closed it earlier as it was Equifax's 30 day trial.

This was back in late 2007 so by the time 2014 rolls in I should have no problem, if it was defaulted or otherwise simply late as it'll be over 6 years by then

I don't have any overdrafts (and haven't for years)...

Thanks for the heads up regarding the credit score/number thing - I thought that as well - it seemed a bit weird judging your history with a number. Seemed like "another brick in the wall" type of thing, haha.

My mum visited a financial adviser who said I should take out a credit card for that exact reason.

Once again, thanks for your advice. It's much appreciated.

Regards

kloana

csquare wrote: »

Hi again

Thanks again for another detailed reply.

Yes I'm realistically looking at the ~£100k mark for studio properties in London

I had a look at my credit report although I closed it earlier as it was Equifax's 30 day trial.

This was back in late 2007 so by the time 2014 rolls in I should have no problem, if it was defaulted or otherwise simply late as it'll be over 6 years by then

I don't have any overdrafts (and haven't for years)...

Thanks for the heads up regarding the credit score/number thing - I thought that as well - it seemed a bit weird judging your history with a number. Seemed like "another brick in the wall" type of thing, haha.

My mum visited a financial adviser who said I should take out a credit card for that exact reason.

Once again, thanks for your advice. It's much appreciated.

Regards

You can look again - free for life - via Callcredit, at https://www.noddle.co.uk. It may not be as detailed as Experian or Equifax, but I love it. NB: They'll also throw a number (on a 1-5 scale) at you - ignore it!

Click onto any of your open/closed accounts and you can see month-by-month payment history for the past 6 years. Each month is denoted by a coloured payment indicator. Look out for any little blobs that are not green in colour - you need to be 6+ years clear of these to be 'perfect'.

And yes, definitely look at credit building (credit cards). If you clear the 6 year barrier and have shown a commitment to repaying other credit (proper credit, not phone contracts), you'll have few worries.

Just one nosy question, but it is relevant - is your deposit made up of your own savings entirely? Or have you been helped by parents or similar, particularly in the recent past...?

csquare_2

Yeah I tried using noddle but it said there was a problem verifying my details so couldn't get past the signup process.

The majority of the money was given to me by my late grandmother. It helped a lot in the big move to London earlier this year & paying for courses to get into the job/where I am today!

Regards

kloana

csquare wrote: »

The majority of the money was given to me by my late grandmother.

That'd be fine - it's common to be asked to prove the source of your deposit. Both from a money laundering point of view (!), as well as from the point of view of lenders, who take a different approach to 'borrowed' deposits, or money 'given' by (living) parents.

Good luck!

csquare_2

OK - that's good to know.

It was an inheritance from a (now deceased) relative.

Could that pose as a problem?

Ta

kloana

csquare wrote: »

OK - that's good to know.

It was an inheritance from a (now deceased) relative.

Could that pose as a problem?

Ta

I bought in just the same way. No problems at all. Bank asked where it was from (as I assume is standard, but have only ever made one mortgage application), and marked it down as 'inheritance'. Solicitor asked where it was from, and to prove it, for anti-money laundering purposes. They were willing to accept a bank statement (showing the funds in deposit there) as satisfactory provenance, but I also sent them the bill of sale for the deceased person's ex-property from where the majority of the funds had arisen from. Easy peasy.

csquare_2

Thanks again for your input!