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Advise needed! Excellent credit score but no to mortgage
Moosey21
Posts: 8 Forumite
Hi,
Just wondered whether anybody could offer any words of encouragement for me. My partner and I are first-time buyers with only a small deposit so would like to purchase a new build with the help to buy scheme.
My partner had spoken to Taylor Wimpey's mortgage advisors today who have basically told him he cannot get a mortgage.
He had a poor credit score a few years ago and has been working hard to build it back up. To do this, he's been borrowing small amounts of money (that he didn't need) and paying back straight away. His credit score is now excellent but because he borrowed from payday loan companies, they've said it looks like he couldn't manage his monthly finances. He's explained that he didn't need the money and he paid back within days but its still no. Apparently we have to now wait 6 years until they've dropped off his file?
We have a young family and cannot see how we'd raise a higher deposit in the future.
Any advise greatly received!
Just wondered whether anybody could offer any words of encouragement for me. My partner and I are first-time buyers with only a small deposit so would like to purchase a new build with the help to buy scheme.
My partner had spoken to Taylor Wimpey's mortgage advisors today who have basically told him he cannot get a mortgage.
He had a poor credit score a few years ago and has been working hard to build it back up. To do this, he's been borrowing small amounts of money (that he didn't need) and paying back straight away. His credit score is now excellent but because he borrowed from payday loan companies, they've said it looks like he couldn't manage his monthly finances. He's explained that he didn't need the money and he paid back within days but its still no. Apparently we have to now wait 6 years until they've dropped off his file?
We have a young family and cannot see how we'd raise a higher deposit in the future.
Any advise greatly received!
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Comments
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Ouch!!! Payday loans to improve history is a very bad idea. Alot of lenders (especially high street lenders) see it as a negative thing.
They wouldn't be interested in knowing whether your partner borrowed them if though he didn't needed them. The fact is that it would still show up on his credit file. And as you mentioned, these payday loans show that he can't manage his finances. These are taken absolutely in desperate circumstances where you have no other options left!!!
I'm afraid they would stay on credit file for 6 years and with a small deposit, you would really struggle!!!
I'm sure others will contribute with their advice as well.0 -
NatWest decline any applicant with payday loans. Nationwide don't like them and have been known to decline just before offer, but the other HTB lenders such as Halifax and Woolwich, AFAIK will not automatically decline for PDL use.
Which broker was it, NHMH? Did they try to get a DIP? If so, who with?I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
WARNING - from this post
Payday loans are not a method to improve your credit rating.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Who has given people that advice/information?
The PDL lenders themselves?I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
kingstreet wrote: »Who has given people that advice/information?
The PDL lenders themselves?
You would be surprised at the number of people who consider obtaining credit to be a way of improving their rating. Even those with previous history of ARP's, DMP's and bankruptcy. Rather than a more measured approach of credit as required along with a disciplined approach to saving. For a whole generation obtaining credit was too easy.0 -
I routinely suggest a low-limit credit card, with repayment of the full balance each month, using the card only for regular expenses as a way of helping the credit worthiness of potential future mortgage hunters, but I'm wondering if the PDL lender themselves have been peddling this credit-builder line themselves, or if it's "down the pub" advice...I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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I'm not sure who told him this was a good idea. I suspect it was a bit of both! It was news to me anyway, as I would've told him not to!
But, it is done now.
I'll get some more details from him later - it was a very sore subject earlier so he wasn't very forthcoming.
There is a possibility we can get a larger deposit with the help of family so not feeling quite so glum now!0 -
This is rubbish about Halifax, I had one still on my file from 2 years ago for cashback. I had zero issueDon't put your trust into an Experian score - it is not a number any bank will ever use & it is generally a waste of money to purchase it. They are also selling you insurance you dont need.0
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kingstreet wrote: »I routinely suggest a low-limit credit card, with repayment of the full balance each month, using the card only for regular expenses as a way of helping the credit worthiness of potential future mortgage hunters, but I'm wondering if the PDL lender themselves have been peddling this credit-builder line themselves, or if it's "down the pub" advice...
PDL's really are a last resort. Using one suggests that no other lines of credit remain or even accessible. Even banks will grant short term overdrafts. More to this tale perhaps....0 -
I suspect it was more that he thought using a PDL was quicker. I'm fairly certain he didn't research any other options nor take proper advice.0
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