RBS Mortgage declined

Deputy19

I have just had my mortgage application declined by my bank RBS. It was initially deferred but the next day I received a phone call saying the application had been refused. Their reason was that I have poor/bad credit card useage ie I have gone over the agreed limit on one of my cards. This may have happened a few times as I forget that the PPI payment isn't included in the minimum payment...

I am now extremely worried as from what I can gather I'll not be able:
a) apply for a mortgage within 3 months
b) use a high street lender
c) get a favourable interest rate

The reason for the mortgage is because I am going through a divorce. I was trying to remortgage the property with additional funds to pay off the soon to be ex wife's equity. I have gone through the figures with RBS and they were happy with 83% LTV. I do Have some outstanding credit card debt to the value of £12k but this is to be paid off, with savings, prior to taking on the mortgage.

Can anyone advise on the next course of action I should take. I want to stay in the property. Should I see if my current lender will provide me with a suitable product - they are Paratus AMC, formally GMAC. I am with this company because at the time I took the mortgage out, 7 years ago, I was self employed and was advised accordingly by an independent mortgage advisor.

Any help much appreciated. Thanks

Dave_Ham

They will not offer you new terms, but just because RBS have declined you; does not mean other lenders will.

I suggest you get copies of your Experian, Equifax and Call Credit files and get to a broker.

Try and get a recommended one..

All the best

Deputy19

Just a quick update on this ... I've gone on Equifax's website and printed off my credit report and score. I was surprised to see that my score was above average and good. I will definitely seek out a good mortgage broker as I am now really surprised that I was refused by my personal bank RBS for a mortgage.

amnblog

Your 'score' as shown on the credit bureau's details is of no relevance to a mortgage lender.

A good mortgage broker with experience on adverse credit cases will sort you out.

Deputy19

I'm not sure I understand why my 'Score' and credit report is of no relevance to a mortgage lender?
How would I go about finding a 'good' mortgage broker with experience in adverse credit?
Thanks

kingstreet

Lenders do not see the CRA score. This is a marketing tool to convince the unsuspecting that the CRAs are all-knowing. They aren't and their scores are meaningless until they start lending you money. Lenders take only the raw data and their system calculates the lender score.

Your three credit files will show different things. Something on your Equifax file may not be on Experian or Call Credit, so a broker needs all three to best approach the correct lender(s). Obtain them before you go to a broker.

Experian_company_representative

Most lenders do obtain scores from the CRAs, but built to their requirements. The scores you as a consumer can get from there CRAs can only be a guide as they give a general assessment and only look at your credit report. Lenders' scores usually look at other things as well, such as the details you provide on your credit application form, so will be different.

James

Dave_Ham

Experian_company_representative wrote: »

Most lenders do obtain scores from the CRAs, but built to their requirements. The scores you as a consumer can get from there CRAs can only be a guide as they give a general assessment and only look at your credit report. Lenders' scores usually look at other things as well, such as the details you provide on your credit application form, so will be different.

James

I do not believe this to be accurate, as stated lenders take the information and interpret themselves.

kingstreet

Q - Has anyone ever been declined credit if they have a "999" score from a well-known CRA?

A - Yes.

The prosecution rests, m'lud.

Public perception of these "scores" and the reality of their usefulness is vastly different.

Sorry James, you have your product to sell, but for me, all you do is muddy the waters...

Experian_company_representative

Yes that's right, you can be refused credit with a decent credit history (and therefore a decent CRA report score) as other factors are taken into account by lenders. But the point I was making is that lenders do obtain scores from the CRAs, these are just not the same scores that's all. Some people on here seem to think CRA scores made available to the public are irrelevant because CRAs are not lenders and therefore have no business calculating scores. But our businesses are built on providing data and analytics, including scores. They key is to understand what the scores you can get from us do and do not tell you. I think our website makes this very clear.

James

kingstreet

Experian_company_representative wrote: »

Yes that's right, you can be refused credit with a decent credit history (and therefore a decent CRA report score) as other factors are taken into account by lenders. But the point I was making is that lenders do obtain scores from the CRAs, these are just not the same scores that's all. Some people on here seem to think CRA scores made available to the public are irrelevant because CRAs are not lenders and therefore have no business calculating scores. But our businesses are built on providing data and analytics, including scores. They key is to understand what the scores you can get from us do and do not tell you. I think our website makes this very clear.

James

That may be the case, James.

However, repeated posts on here demonstrate that people just don't read the website and have an unrealistic view of what relevance the score has to their application, particularly for a mortgage.

For them the score is what the lender gets from you, regardless of the historic adverse still visible and they think the opinion of the CRA on the quality of their file is the same as the lender's.

Frankly, you are the only CRA representative to post on here, so I applaud your commitment and welcome the help you give to consumers and you do make clear the indicative nature of the Experian score pretty much every time you respond.