Partners Poor Credit History

Breakdance

Hi,

I have a credit score of 999 (excellent) and my fianc! has a credit score with Experian of 716, which is just 5 points away from entering the Fair category.

My partner has had previous credit issues and difficulties in the past where her Experian report is showing 10 accounts satisfied and 4 defaulted. However all default accounts have now been paid in full but are awaiting update where I am expecting her credit score to enter into the fair category.

We are both in secure job with long term service. I earn a salary of £56k and my partner earns a salary of £35k per annum. We have a £50k deposit saved and are looking to buy a house currently on the market at £330k. i.e we need to borrow £270k

We have very little debt apart from a car (owe 9k) and our monthly phone bills.

Due to the above and my partners previous credit history, can anybody advise on if we would have any issues getting a mortgage and who would be best to approach under the circumstances? I am concerned that if we apply and it is rejected it could affect both our credit scores which would put is back…

Any help would be very much appreciated.

kingstreet

Forget about these scores Experian give you. They mean nothing and lenders don't even get to see them. Lenders take the raw data from your credit history, add it to the other application data and score it based on its own experience/model.

The lower the loan to value and the older and smaller the defaults are, the better your chances.

Take all three versions of your credit files to a whole market broker and have them determine the best lender/product for you. Lenders do not all supply data to, or take information from, all three CRAs, so one credit file may look better than another and a broker will know which lender uses which CRA, so there's potential there to get a better deal.

Guest101

Also defaults show for 6 years, from default, not settlement. And in general are a red mark, 4 is a big red mark. However u have a good deposit.

ACG

When are the defaults DATED.
With a 15% plus deposit, assuming the defaults are over 2 years old there is a lender or 2 who would consider them.

You would need a broker though.

thequant

Breakdance wrote: »

Hi,

I have a credit score of 999 (excellent) and my fianc! has a credit score with Experian of 716, which is just 5 points away from entering the Fair category.

My partner has had previous credit issues and difficulties in the past where her Experian report is showing 10 accounts satisfied and 4 defaulted. However all default accounts have now been paid in full but are awaiting update where I am expecting her credit score to enter into the fair category.

We are both in secure job with long term service. I earn a salary of £56k and my partner earns a salary of £35k per annum. We have a £50k deposit saved and are looking to buy a house currently on the market at £330k. i.e we need to borrow £270k

We have very little debt apart from a car (owe 9k) and our monthly phone bills.

Due to the above and my partners previous credit history, can anybody advise on if we would have any issues getting a mortgage and who would be best to approach under the circumstances? I am concerned that if we apply and it is rejected it could affect both our credit scores which would put is back…

Any help would be very much appreciated.

When it comes to mortgages, if you have the deposit and the earnings to satisfy the income multiple then credit scores don't really come into it.


banks quite often grant mortgages to people but then when they try to cross sell them other products they turn them down for failing the credit checks.


Get yourself upto 25% deposit and you should be able to secure a mortgage with a bit of work.

ACG

thequant wrote: »

When it comes to mortgages, if you have the deposit and the earnings to satisfy the income multiple then credit scores don't really come into it.


banks quite often grant mortgages to people but then when they try to cross sell them other products they turn them down for failing the credit checks.

What an absolute load of rubbish.

Credit scores DO count with all but a few lenders.
Cross selling has no influence on the decision of your mortgage what so ever.

thequant

ACG wrote: »

Cross selling has no influence on the decision of your mortgage what so ever.

You miss understand my post, I'm saying that after a mortgage has been approved and the bank then tries to sell other products there is a higher chance of being turned down for these.


One advisor from Barclays told me this happens quite often, in that he has approval for mortgage for a customer yet when they subsequently apply for a other products such as bank account they will get turned down.


The reason for this ? Barclays lending critrea for mortgages when I last inquired was that defaults over 2 years which are satisfied are ignored, defaults within the last 2 years under £100 are ignored.


Yet these are automatic red flags which will prevent you obtaining a bank account with them.


As the mortgage advisor told me off the record, "I hope your not recording this, but the bank doesn't care if you can pay the mortgage, we will just take the house back. All we care about is that you provide enough equity to allow us to do this"

ACG

Sorry, misunderstood.
Although lenders do credit score - including woolwich.

Also i think your mortgage advisor is incorrect. Lenders DO care if you can pay it back, the last thing they want to do is have to repossess your houses. It costs money and time and they may not end up getting all of their money back after legal proceedings etc.

thequant

ACG wrote: »

Sorry, misunderstood.
Although lenders do credit score - including woolwich.

Also i think your mortgage advisor is incorrect. Lenders DO care if you can pay it back, the last thing they want to do is have to repossess your houses. It costs money and time and they may not end up getting all of their money back after legal proceedings etc.

Of course they use a credit score, no company in it's right mind lending money would not credit scores. I'm just pointing out that when it comes to mortgages its' not a big a factor as most people expect.And the criteria can be less stringent than for other products.


Of course if you applying for 10%, then you are at the limit of the banks risk threshold and credit score will be crucial.


Anecdote from my own past, Applied for a credit card with a £20k limit from one bank, while at the same time applying for a bank account with them.


I got accepted for the credit card and given the £20k limit but was turned down for the bank account. When enquiring why I was refused the bank account I was told the bank account comes with an automatic £500 overdraft limit and due to my poor credit history I was at serious risk of defaulting, yet they gave me a £20k credit card!

Breakdance

Thanks guys, very much appreciated.

As requested the 4 defaults are as per the below but have now all been paid in full.

Date. Value
1. 31/08/13. £531
2. 01/12/12. £880
3. 04/02/11. £68
4. 31/12/10. £431

Not sure what to do for the best now....... Ideally we would like to purchase the property around Feb/march this year, but from what has been detailed above, I am not 100% sure we will get approved...

Any other good tips? Comments by all are very much appreciated.

Running_Horse

Are you linked financially? As his income is higher it might make sense for him to do the mortgage on his own, then get joint bank account later.