Credit acceptance!

DMP1

I cleared all my debts of defaults dating back from 2007 in the summer, it was about £14,000 worth or so


I checked my credit files and although all three debts were partially settlements (all with letters in writing confirming the matter was closed) the debts have all been zerod and all but one has fallen off my credit record due to 6 years past


I applied for a Capital One Complete Credit Card (0% on purchases and transfers until may 2014 and 34/.9% apr after) just to see if my credit file etc has improved ahead of mortgage application later in the year


I actually got accepted for the card


Now I am not even signing it and sending it back because I don't actually want or need the card. I just wanted to see if I could get accepted for credit which I did, albeight at a high interest rate


Does this acceptance show me that my chances of mortgage acceptance are on the up (my salary is £23,000 and my fianc!s £16,000, deposit £15,000, house price about £120k)


I know criteria is different etc but I can safely say while I had all those debts getting credit was just not possible, even with crappy vanquis and aqua


Not tthey are all cleared I have been accepted first attempt


Can someone give me some wisdom on their thoughts of my potential mortgage acceptance?


Thanks

MrSilk

I believe mortgage applications are more in depth. Capital One are easy to get as they have high APR. I'd say you need to use at least one credit card for a year before you could get accepted for a mortgage, to dhow you can handle credit responsibly. Do you have any other forms of credit at all?

Don't see why you've applied for credit if you don't need it? Just use the eligibility checker or something??

DMP1

The eligibility checker isn't the same as actually getting accepted so I just wanted to see if I could get accepted as any high APR card has turned me down when I had those debts. They arnt long cleared so I was surprised to be accepted

I just have two bank accounts currently (with no overdrafts) and I have used payday loans in the past which have also all been paid on time (I know payday loans aren't exactly a good example of credit but it'll depend in the underwriting criteria I guess)

I'm reluctant to get the credit card as I don't need it, I will have none of those defaulted debts on my credit file by march 1st so any bad credit dealings I have ever had credit wise will be gone (due to 6 years past)
B
Will this help?

MQ77

I am in a similar position. Although I have been accepted for luma, vanquis, aqua and today found out littlewoods with a 1500 limit.

My last defaults should drop off in february. Hopingvfor a mortgage by the summer.

sirwiggum

Defaults falling off an account are a huge relief!

However, the sneaky one to watch out for is the Arrangement to Pay as preferred by the liked of Barclayard.
These are intended to be 6 monthly pre-cursors to a default, however in practice they are rotated every 6 months.
Therefore, get into difficulties in 2007, finish paying off the arrangement in 2012, the arrangement to pay will be on your credit file til 2018 - whereas a default would be gone by 2013.

DalePie

DMP1 wrote: »

I cleared all my debts of defaults dating back from 2007 in the summer, it was about £14,000 worth or so

Well done :beer:

DMP1 wrote: »

I checked my credit files and although all three debts were partially settlements (all with letters in writing confirming the matter was closed) the debts have all been zerod and all but one has fallen off my credit record due to 6 years past

Good, you will need them all to fall off before your file becomes mortgage material.

DMP1 wrote: »

Now I am not even signing it and sending it back because I don't actually want or need the card.

Wow! Hold on there!

Part of the trick to building a credit file is actually showing you can handle credit. You should keep the card, use it and prove you can now handle credit responsibly. I'll explain more below.

DMP1 wrote: »

Does this acceptance show me that my chances of mortgage acceptance are on the up (my salary is £23,000 and my fianc!s £16,000, deposit £15,000, house price about £120k)

Nope, it does show you're well on the way however!

Some Capital One cards are "sub prime" which means you can get them even if you have defaults on your file. Check your APR, if it's 20% or above you're in that subprime group.

DMP1 wrote: »

Can someone give me some wisdom on their thoughts of my potential mortgage acceptance?

You're well on the way to getting a mortgage. What you need to do right now is:

- Keep the card, use it and make regular payments. This "builds" your new credit file and shows you're a good egg .
- Check the statute barred date on your old debts and watch them falling off.
- Build up a new platform of decent financial products e.g: Move from a basic bank account back to a proper current account. Pay as you go phone to a contract one etc etc. Space applications for better products / credit every 3 to 6 months.
- Everytime you obtain something new, your "rating" (Doesn't exist but it's an analogy) will fall slightly. This is okay, it's the long term we are worried about.
- Keep saving for the deposit.

I've long suspected that a good credit file consists of:

- A bank account, up to date and in credit.
- A contract phone, up to date
- A credit card, up to date perhaps even carrying a manageable balance
- A long term loan, up to date, perhaps for a car or other planned purchase.
- A mortgage, up to date with healthy equity.

If i were you, i'd be looking for my report to reflect this as much as possible. Perhaps not the loan because you should be busy saving for a deposit but a bank account, credit card and mobile phone would be a great place to start. None of this should cost you more than your time. Some things might even save you money you can put towards your deposit.

Hope that helps

Jason_Bourne_2

• DalePie wrote: »

  Well done :beer:
  
  
  I've long suspected that a good credit file consists of:
  
  - A bank account, up to date and in credit.
  - A contract phone, up to date
  - A credit card, up to date perhaps even carrying a manageable balance
  - A long term loan, up to date, perhaps for a car or other planned purchase.
  - A mortgage, up to date with healthy equity.
  

  
  
  I'm in a similar position. Just become debt free (21k) paid off. Most accounts defaulted and one was an arrangement, which I'm trying desperately trying to get a default back dated.
  
  
  Will I be in a good position moving forward? Have I already made a little head start to repairing/building my file?
  
  
  - I have a Mortgage with equity which has had no late payments, been running 5 years.
  - Current account with all green markers, never overdrawn.
  - 2 x contract phones in my name, no late payments for the life (4 years+)
  - A 2 year personal loan shows on my file, it's only O2 for an iphone but it's up to date with no late payments. Apparently this is what they do with the bill now, the phone is a loan and the bill is a contract.
  - No credit card but I just got one of those cash plus cards with the year subscription which shows as a 12 month loan
  
  
  
  
  Great post btw

DMP1

Hi Guys


Wow thank you all for your contributions, I am overwhelmed at the feedback and comments, thank you!


I have a current phone contract and have had it since 2001, never missed a payment in 12 years, however it isn't on my credit file?


I have 2 current accounts, both in the green and never overdrawn, one started in 2006 and one in 2011. These are both on my file.


Only 1 debt is left on my credit file and it falls off at the start of march


I have 7 payday loan closed accounts on my credit file that were between 2011 and the May of 2013, all paid in full and no late payments.


Im still reluctant to get the credit card because I really don't want the temptation of having credit available. I abused it in the past.


I was hoping that the debts falling off the file and a good salary and deposit would be enough, but maybe that is not the case?


Well to everyone who has worked hard to clear their debts!

Thrugelmir

DMP1 wrote: »

I have 7 payday loan closed accounts on my credit file that were between 2011 and the May of 2013, all paid in full and no late payments.

A major negative as far as mortgage applications are concerned.

As far as mortgage applications go. The key factors that lenders appraise you on are:

Electoral Roll Registration
Secure Employment
Sound personal financial management demonstrated by the satisfactory repayment of a loan for example. .

DalePie

DMP1 wrote: »

I have a current phone contract and have had it since 2001, never missed a payment in 12 years, however it isn't on my credit file?

I'll bet it pops up somewhere. Who is the contract with because there are lists on this forum where you can trace roughly where it will be reported. I have had Virgin Media BB for ages and only just realised all those lovely green P's were being reported to Equifax!

DMP1 wrote: »

I have 2 current accounts, both in the green and never overdrawn, one started in 2006 and one in 2011. These are both on my file.

Perfect!

DMP1 wrote: »

I have 7 payday loan closed accounts on my credit file that were between 2011 and the May of 2013, all paid in full and no late payments.

You need to avoid payday loans. They do affect your credit because they are often viewed as "lender of last resort" credit. Now you have the perfect reason to keep that credit card! Instead of 10000000% APR you can cut that right down.

Budgeting is the real answer however.

DMP1 wrote: »

Im still reluctant to get the credit card because I really don't want the temptation of having credit available. I abused it in the past.

Perhaps now is the time (New Years Resolution) to get fully into the MSE way of life? You last took out a payday loan in May which tells me you could do with budgeting a little bit better. If you're worried about maintaining a credit card you're not in shape enough for a mortgage yet.

The MSE planner is here: http://www.moneysavingexpert.com/banking/Budget-planning

Like i said, maybe now is the time to turn over a new leaf, prove you can manage your credit properly and build up your financial fitness ready for taking on a mortgage, sounds like a plan to me :beer:

DMP1 wrote: »

I was hoping that the debts falling off the file and a good salary and deposit would be enough, but maybe that is not the case?

It's pretty true but taking on a mortgage is a huge step into adulthood. It's effectively a loan you take out for 30 odd years, that's almost half an adults life!

A little bit of planning and a change of habit will set you off on the right path! I'd hate for you to take on that kind of burden before your ready for it and have troubles down the line!

DalePie

Thrugelmir wrote: »

A major negative as far as mortgage applications are concerned.

As far as mortgage applications go. The key factors that lenders appraise you on are:

Electoral Roll Registration
Secure Employment
Sound personal financial management demonstrated by the satisfactory repayment of a loan for example. .

Lmao

You took the words right out of my mouth. I must have been typing that you pressed send!

Yep, payday loans are a bad thing to take out. Nothing that cannot be fixed given time but you need to get your budgeting hat on.