Wife has poor credit rating from recent default £3 payment HELP

JRKirky

Hi... We are in the process of selling and buying a new house. We have approx. £70k equity and want to extent our current mortgage (14yrs left) and borrow an extra £150k (over 25yrs) to buy a family home.


We both work fulltime in government posted occupations, earn good salaries and are aged 34yrs. I have had a mortgage since the age of 21 and my wife joined me on said mortgage 5years ago when we bought our current property.


Today we both did credit checks before seeing the mortgage advisor. Mine was 100% fine but my wife discovered that the report stated she had failed to make a total of 3 payments to Isme (online catalogue type website) for a Christmas present she purchased last Dec (2013).


This has resulted in despair. The actual issue is with a £3 delivery charge, YES A £3 delivery charge that was made for the laptop that she ordered and was dispatched in December. The laptop itself is on a deferred, interest free offer that isn't due to be paid until June. She has not received anything in the post, nobody has telephoned and she has not been emailed by Isme instructing us that the £3 was owed and hadn't been paid. As a result her credit rating has took a monumental hit (at face value)! Looking at the website, in small print at the bottom of the screen it does say that any delivery charges are not subject to any credit agreement and would need to be paid. When you view the credit report I looks like it is for £300+ but it is simply the £3 delivery that is due not the actual funds for the lap top.


This is simply an oversight, nothing more. We both have credit cards, obviously a current mortgage, a loan and various other outgoings, which all are paid on time with absolutely no negative issues!


Are we going to be refused a mortgage based on the above?
If we are, what can we do? (already have an offer in on another house).
On face value I accept that the score looks poor. But, do lenders not take any mitigating circumstances or previous good history into account?


Knowing how stringent current lenders are about releasing funds we are terrified that this will effect our application for an increased mortgage. Needless to say, we have contacted Isme and the credit company that provide the funds on behalf of Isme. Neither are committing themselves to giving us a guarantee that this dent on her credit score can or will be rectified.


Please help - I have never missed a mortgage/loan payment in 12 years!!!!!! James (with little financial knowledge).

ACG

How much is the purchase price and deposit amount?

JRKirky

Purchase price is £220,500 with a £70,000 deposit from the equity in our current house.

ACG

Your broker will be able to place this.

If he/she is not coming back with normal lenders, find a new broker. There should be no reason to use an adverse lender for this.

Also, have you checked all 3 copies of her credit report? The default may not be showing on all 3.

JRKirky

2 out the 3 have been checked - just waiting Experian PIN number. Apparently early indications suggest the poor rating is on there too though.

ACG

Forget the score the agencies give you its worthless.

Lenders use the information on the reports to come up with their own score.

mrskv

ACG wrote: »

Your broker will be able to place this.

If he/she is not coming back with normal lenders, find a new broker. There should be no reason to use an adverse lender for this.

Also, have you checked all 3 copies of her credit report? The default may not be showing on all 3.

ACG thanks for the reply, it is my credit rating that is affected I find the whole situation somewhat terrifying to think this could affect our immediate future when prior to this, I have never defaulted on any form of credit agreement. These are the actual circumstances as they are;

I opened the account on the 14th December 2013 in order to purchase a laptop to the value of �389. Whilst my initial intention was to make the purchase outright, I was offered the alternative of purchasing on an interest free deferred payment option, the status of which is currently no payment required until the 31st May 2014, so obviously no default payment.

the purchase price and the delivery charge are combined to make a total purchase price of �392 and BOTH are categorised under the 'buy now pay later option' as a single outstanding amount.

Since then I have received monthly notifications via email to my inbox advising me that my monthly statement is available to view by logging in to my account. Genuinely believing there to be no monies owed until the agreed repayment date of 31st May 2014, admittedly I did not feel the need to check. I subsequently received a paper statement in March 2014 which I obviously opened and this was the first I became aware of any issue with the account. Believing it to be an error I contacted the customer services department at which point I learned it was the delivery fee of �3.95 which was classed as outstanding and which I paid immediately over the phone in order to rectify the situation. Having explained the circumstances to their customer service department they agreed with me, removed the 'interest' which I think had accumulated to approx 17p and I think they actually advised me then it would not be recorded as a missed payment.

I have contacted their credit department today who have in turn escalated my issue to their complaints department. I am assured they will contact me in the next 5 days however I appreciate this doesn't address the issue at hand. My concerns are that the delivery charge upon initial purchase is misleading in that it suggests it is part of the total outstanding balance payable under the deferred payment credit agreement. Secondly, no indicators if any outstanding or overdue monies were made clear to myself either via the email contact or a telephone call until I received the paper statement, at which point it was evidently too late as the payments had already been recorded as missed.

I've sought advice from the Financial Ombudsman who feel that there is a case for complaint which they have taken up on my behalf and are contacting the credit company direct. I have also added a notice of correction to my credit file which I understand is the correct procedure for any payment in dispute although this can take up to 7 days apparently to register??

Our FA has certainly given me the impression this morning that the concern is significant enough to result in us not being able to obtain a mortgage full stop. Made worse by the fact that James can not be considered separately to me as we are married, even though his rating is perfect.

I suppose my question is, is the market really that rigid at the minute and are lenders likely to take into consideration any mitigating factors which I think we definitely have to say the least.

ACG

Find a new broker, if he is not confident of getting this through then hes either milking it or not very good.

A £3 default and a 30% deposit....
I (and im sure the other brokers on here can give you similar examples) have placed mortgages for people with lower deposits and defaults in the thousands.

Yours is fairly recent, but its £3. Its clearly a mistake rather than a lack of funds.

I will be completely honest, i did not read all of the information in either of those posts as they are a bit on the long side, all that matters is the facts/figures and dates. Nothing you have said would make me think you are unable to get a mortgage.

GMS

Does it show as a default or 3 late payments?

I would be amazed if this can't be done with a standard lender if this is the only issue. May require a call to a BDM or account manager but highly likely to be sorted.

If your broker is unsure then you need to find another.

Do not apply at random to lenders.

Good luck

amnblog

An awful lot of panicking going on here for a scenario that, if it is as you explain we brokers here cannot see as a problem.

JRKirky

It shows as three late payments... Just taken a phone call from our mortgage advisor and our application has been 'referred'. So not immediately accepted, but not refused either!