mortgage refused due to wonga/payday loan

gh4662

This is what the ICO guidance says

An individual has a right to object to processing only if it causes unwarranted and substantial damage or distress. If it does, they have the right to require an organisation to stop (or not to begin) the processing in question.

I would argue that the failure to warn that taking out a payday loan would cause substantial damage, the Experian website even says it may help your credit rating

ciderboy2009

gh4662 wrote: »

... the Experian website even says it may help your credit rating

The important word being "may". The most important thing to remember is that you don't have a single credit rating - every company rates you using their own rules.

The Experian website is probably correct as I would imagine that there probably at least one company who would look on a paid off payday loan as a good thing. The problem is that it's likely to be a high interest bottom feeder.

StuC75

Credit facilities are not a given right, all lenders are able to use own criteria of what they allow and do not allow. Unfortunately you chose a lender who views them in a negative light.

They only go on the hard facts of what is recorded.. Unless there is a underwriter who can step in to alter the decision, but would need a valid explanation of why they were the 'only option'..

gh4662 wrote: »

This is what the ICO guidance says

An individual has a right to object to processing only if it causes unwarranted and substantial damage or distress. If it does, they have the right to require an organisation to stop (or not to begin) the processing in question.

I would argue that the failure to warn that taking out a payday loan would cause substantial damage, the Experian website even says it may help your credit rating

laidbackgjr

I agree 'may' is the keyword, for some lenders, having previous payday loans now cleared may be seen as a positive and increase your chances of being accepted. Each lender have their own criteria, so you may find using a broker to find a lender that doesn't view settled payday loans as a bad thing the key to getting a mortgage arranged.

londonTiger

_Andy_ wrote: »

"Is there any way I can get the information removed from my Experian credit file"

No. No way whatsoever.

you can make commentary on it, and if there was a mistaken identity and someone left bad entries on your credit file you can clarify that.

But the thing is no lender (of small loans) will ever bother to read these. It's all automated as far as they're concerned.

Lennders will probably look into these for mortgages and some larger personal loans, HP for brand new cars etc.

ALso I believe a credit file expires after 6 years of it being closed. So there's that. But it's such a long period of time it might as well be left on forever.

GwylimT

We know pay day loans are bad, I would never use one as I'm well aware it might have a negative effect when trying to get credit, yes, accessing a savings account can lead to a charge, but I would much rather pay a larger charge when the other option is to be refused credit. Taking out a pay day loan is admitting that you have either a low income or you cannot manage your money or in some cases a combination of both. When I took out my first mortgage for years before I was very careful about credit cards, I had one that I used responsibility but I didn't apply for another, I didn't take out car finance etc. My attractiveness to lenders is my responsibility, if I took out a credit card and it negatively effected my attractiveness it would be my fault, not the lender. And as I say this I applied for my first mortgage at 26 so it wasn't as though I had years of financial know how or anything.

What deposit do you have? I would have thought the larger the deposit the more likely the bank was to lend, unless of course that deposit is a gift.

londonTiger

GwylimT wrote: »

We know pay day loans are bad, I would never use one as I'm well aware it might have a negative effect when trying to get credit, yes, accessing a savings account can lead to a charge, but I would much rather pay a larger charge when the other option is to be refused credit. Taking out a pay day loan is admitting that you have either a low income or you cannot manage your money or in some cases a combination of both. When I took out my first mortgage for years before I was very careful about credit cards, I had one that I used responsibility but I didn't apply for another, I didn't take out car finance etc. My attractiveness to lenders is my responsibility, if I took out a credit card and it negatively effected my attractiveness it would be my fault, not the lender. And as I say this I applied for my first mortgage at 26 so it wasn't as though I had years of financial know how or anything.

What deposit do you have? I would have thought the larger the deposit the more likely the bank was to lend, unless of course that deposit is a gift.

Appluad you for your responsible borrowing, but the consensus is that banks don't really care about your frugality with money, they actually like people who spend loads of money on credit cards (provided they repay it all back).

I think today you will struggle to get a mortgage with just a credit card or two on your credit file. You will need to have a much more "active" credit file than that.

Not all credit file entries are about borrowing, phone contracts typically have credit file entries.

Current accounts too have entries on your credit file these days

GwylimT

londonTiger wrote: »

Appluad you for your responsible borrowing, but the consensus is that banks don't really care about your frugality with money, they actually like people who spend loads of money on credit cards (provided they repay it all back).

I think today you will struggle to get a mortgage with just a credit card or two on your credit file. You will need to have a much more "active" credit file than that.

Not all credit file entries are about borrowing, phone contracts typically have credit file entries.

Current accounts too have entries on your credit file these days

I successfully got another mortgage in February, using a credit card responsibly doesn't mean you are frugal.

bargainbetty

Try Halifax. I applied to them after having been turned down by Santander (due to a late payment 5 years and 10 months previously, apparently).

Halifax were willing to listen to an explanation of matters, and offered me a mortgage on a good rate. The house purchase fell through, but I got the offer.

It's worth a shot, at least, to make an appeal to the lender about the reasons for refusal, and offer up the explanation for the PDLs.

simeyb

I think that increasingly lenders, particularly mortgage lenders, but cards and loans too, are taking a harder and harder line where they see that an applicant has taken a PDL - forget what the CRA's say about them - PDL's on your credit file are almost as bad as Defaults - until this Government grows a pair and puts all these lenders out of business, it is down to the individual to be savvy and know what their file says about them. I understand that you may have needed the funds quickly, but would one day have made the difference? If the bank was shut but Wonga paid you into your account in 15 mins, how did you get it out of a cashpoint which tend to have £250 daily limits, or did you ping it across to another account? Anyway, I'm afraid that regardless of the wrongs and rights, the reference is there.