Sofa on credit preventing mortgage?

chloe302

Hi,

I'm currently in the process of applying for my first mortgage, but have failled a credit check with Nationwide. The guy I spoke to was quite surprised, and advised that I register with Experian to look for anything obvious.
I am currently scored as 'good' and have no outstanding/ missed payments ever showing on my credit history.
However, in November 2013 I did buy a sofa on credit, which I still have about 950 outstanding on. I have checked all of my bank accounts, and have a spare 850, and am sure I would be able to find the extra 100 to clear off the sofa if necessary.
My question is, will this still show as a negative on my credit history, as I've applied for credit in the past 6 months, even if it is cleared off? I don't want to use my little nest egg (and I realise it is a very small nest egg) if it's not going to make a difference to my credit rating. Will this still show as a negative factor until 6 months has elapsed from taking out the credit?
I live on quite a tight budget, but have worked out that what I want to get on a mortgage is less than I currently spend on rent. I'm not willing to put myself on an even tighter budget than I already am. But I'm finding it frustrating that, despite NEVER having had a late payment on anything, and living within my means, I'm still coming up against barriers. I have no credit cards, only an overdraft, which I haven't gone over in years, so have come to the conclusion that the only thing preventing me passing a credit check is the bloody sofa!!!

Any advice greatly appreciated!!

Thanks

YorkshireBoy

Something else is causing the problem, not the sofa! Check the other credit reference agencies to see if they hold some bad data on you...


Electoral roll info missing
Financial associates
Incorrect data

PaulW922

I agree - if you have been paying the credit on the sofa on time it will if anything be a positive indictor. Is it possible that you just don't have much of a credit history at all, or that your income to debt ratio is not good?

You might want to try a mortgage broker who can give you advice based on the wider market - don't keep applying for mortgages though as all those searches won't help.

Joe_Bloggs

I agree that there may be issues if you have not checked your credit reports before applying for a mortgage. A lack of credit worthiness is one way to fail an application. There are often errors on credit reports so it is often worth a look/ free trial to see them and correct if possible.

It is difficult to demonstrate credit worthiness when you have your deposit money in savings, hidden from the CRAs, and are making the best use of 0% credit deals.

On the 26th of April and perhaps today the FCA Mortgage Market Review is influencing stricter mortgage lending affordability rules.

J_B.