Mortgage application & credit check

azure17

Hi everyone, I'm currently getting through the process of getting my own place as a first time buyer. I had my offer accepted by the end of last month and applying for a mortgage at the moment.

Earlier last month my broker got me a DIP with halifax but they required me to put down a 15% deposit (my initial plan was 10%). After talking to my parents I've obtain the fund I need. The broker was then trying to get a new DIP for the 15% deposit but the automatic system declined the application due to "credit check failed"

I've checked all 3 of my credit reports, both Experian and Equifax shown as excellent, but CC is showing one of my old credit card when I was a student that went into default more than 5 years ago.

My broker has later contacted Woolwich and got a DIP with them and we are about to start the full application tomorrow.

I'm worried about whether the default credit card would have an affect on my application as the amount I'm trying to borrow is more than 4.5x my salary. My credit record since then however are pretty spotless. I currently have over 20k available credit and I'm using 9% of them.

Could anyone help me with this and see if it's gonna be a problem?

Thanks!

Dave_Ham

Virtually impossible to confirm either way without the full details.

Typically on a credit score issue, Woolwich are more concerned with last 3 years and tend not to change from their DIP decision result based upon credit scoring alone.

That said, the amount of the default listed will have an impact on the end result.

azure17

Dave_Ham wrote: »

Typically on a credit score issue, Woolwich are more concerned with last 3 years and tend not to change from their DIP decision result based upon credit scoring alone.

Thanks, this is good to hear.
The default listed is £73.

Dave_Ham

That is within their tolerance criteria wise, so I suspect this side of it will be fine.

They can be painful and often slow to deal with, so ensure your broker uses them a bit and knows how and when to chase/push

amnblog

Did the broker not check your credit reports first.

If they had, they would have known that Halifax would not pick up the default until full application stage.

azure17

amnblog wrote: »

Did the broker not check your credit reports first.

If they had, they would have known that Halifax would not pick up the default until full application stage.

We didn't go for a full application with halifax. The broker (covering for my original one who is currently on holiday) was trying to get a new DIP with the new amount of deposit which got declined automatically (despite the increase on deposit compare to the first time).

Woolwich did say they've picked something up in my credit file as well before they give out the DIP but they said they are happy for me to make a full application.

amnblog

and has the broker now seen your credit file?

azure17

Yes he did. He was originally suggesting to go with Halifax to make a full application with a cover letter. But I thought it's a bit risky so we went for woolwich.