Bad Credit Score - help improving plz!

matttye

lynz68 wrote: »

Of course they no who you have borrowed from. Experian even record your payday loans separately from others. It has been widely reported recently how having a payday loan can have an effect on getting a mortgage not all lenders will refuse but some will. Just search on google re affects of payday loans on mortgage applications plenty of info there.

No, they don't.

http://www.experian.co.uk/consumer/questions/askjames248.html

"The credit report you see is more comprehensive than the one lenders look at (with your permission of course) because only you see the actual names of your current and past lenders."

Lenders get to see how much you've borrowed and probably the type of account (i.e. credit card, loan etc.), but not actually who you've borrowed from. I'm not 100% sure but I would expect a payday loan to show up on your credit report that lenders see as a loan, rather than as something different.

Incidentally the person answering the question in the link above is the 'Experian Company Representative' who posts on this forum, so perhaps he could clarify.

lynz68

I can't post a link but search on this site for an article titled "A payday loan could cost you a mortgage".Where it clearly states that Experian began to allow lenders to view the type of loan a customer has taken out be it a standard or payday loan. The article also highlights how some lenders view a payday loan as negative and will simply refuse a mortgage if recent payday loans have been used.

matttye

lynz68 wrote: »

I can't post a link but search on this site for an article titled "A payday loan could cost you a mortgage".Where it clearly states that Experian began to allow lenders to view the type of loan a customer has taken out be it a standard or payday loan. The article also highlights how some lenders view a payday loan as negative and will simply refuse a mortgage if recent payday loans have been used.

Found it thanks

http://www.moneysavingexpert.com/news/mortgages/2012/07/a-payday-loan-could-cost-you-a-mortgage

You're right, Experian now allow lenders to see if it's a payday or other type of loan.

However, the same article says "Specialist lender GE Money, which only sells via brokers, said this week it will not approve home loan applications from borrowers who had taken out payday loans in the previous three months, or twice in the past year."

And:

"James Jones, from credit agency Experian, stresses a payday loan is not always a problem when applying for new credit."

So it seems like, as usual, lenders will apply their own criteria. Some may view a payday loan in itself as negative, as it is basically a wage advance and may signify someone who can't budget/meet payments properly, while others may see a loan repaid on time as a sign that you can meet your credit obligations, just like any other kind of credit.

lynz68

I understand all that but it is still a risk anybody applying for a mortgage should be aware off. Getting a mortgage today is hard enough without something like this adding yet another obstacle.