Getting a joint account & ability to get a mortgage

Hairymonster

Hi,

I am just married and we are considering whether to get a Joint Bank account or not and how it will affect our ability to get a mortgage together.

My Background

I am a discharged bankrupt(since 2010) and have been gradually been building up my credit file, started on credit builder Credit cards but now have freedom rewards card from Barclays.

I had improved my credit file significantly to Fair/Good on Noddle but it is away back down to Poor/Very poor since I have got a lot of credit over the past year for engagement ring, Wedding and Honeymoon. However I have always paid debts and never fell in arrears.

Over past few years I have had 3 loans (I always try to pay them off as early as possible rather than wait full term). 2 are paid off and these were higher interest loans. The one I currently have was £2500 with rate setter at 12.6% so I think I am being more trustworthy for better rates of credit. This sits at £912 still owed which will be paid off by end of February at the latest.

My credit card is sitting at £4000 with a limit of £5000. Obviously this was used for wedding stuff so I will be paying this off for the next 6 months.

My Wifes Background

Hasn’t had a great deal of credit in the past apart from Mobile phones, 2 different cars and also some store cards which she has always paid in full and only uses for when promotions are on. Financially she’s an angel and hasn’t ever fell into any kind of debt or missed payments. She wasn’t even sure how her credit file was until I asked her to get a free trial at a credit reference agency just to check. It came back excellent- I can’t remember the exact number but it was in the highest bracket possible.

All of the household direct debits come out of my Barclays account.

We will probably be looking for a mortgage in the next 1.5-2.5 years and I would like to know the ins and outs of getting a joint account. My thinking is that it may initially affect her credit file by being financially associated with me.... but won’t we end up being financially associated anyway if we’re going for a mortgage together? Once my debts are fully paid though I think my actual score will be much higher than it is the now- it’s only lower at the moment because of the debts I have run up with the wedding etc

Now we are married I am all for it being OUR money rather than hers and mines. I earn more than her by quite a bit and at the moment to balance this out I pay all household bills apart from food and our dogs stuff which we split.

I am still a bit of an idiot with Money though and squander it quite easily. I’d rather we both just had the same account for us to use. And also a joint savings account for savings once my debts are paid. Really a joint account is the most desirable thing for us but I dpn’t want to go down that route if it badly affect our ability to get a mortgage?

Any tips or thoughts welcome?

Thrugelmir

If you open a joint account let your partner run your finances.

You were discharged from bankruptcy in 2010. Yet now still live your life on credit. Spend today pay back tomorrow. Not the ideal profile to be considered for a mortgage. For your own sake have a light bulb moment.

Experian_company_representative

Hi Hairymonster,

If you apply for or open a joint account, then you and your wife's detail will be financially linked on your credit reports.

This means that if you or your wife apply for credit then the company you apply to would look at both of your reports as part of their decision making.

If your wife's report is good, then this shouldn't cause any problems for you, however if your wife wanted to make further applications then your information could have an impact on this.

Having a joint account when you apply for a mortgage shouldn't cause any additional problem, as if you were going to apply for a joint mortgage then the lender would look at both of your information at this point anyway.

If you can wait until your bankruptcy order is off your report (6 years from the bankruptcy date) then you will be far more likely to be accepted.

Make sure any accounts that were included in the bankruptcy have also been updated on your report, and that the default date of these is the same or earlier than the bankruptcy date, they will also be off six years from the default date.

Kind Regards
Neil

Hairymonster

Thrugelmir wrote: »

If you open a joint account let your partner run your finances.

You were discharged from bankruptcy in 2010. Yet now still live your life on credit. Spend today pay back tomorrow. Not the ideal profile to be considered for a mortgage. For your own sake have a light bulb moment.

LOL did you have a full read of the thread? The only reason I am back in debt is due to my wedding which cost a fair amount of Money. It's not a huge amount (£5k) of the total wedding which was over £30k.

My main question is regarding the credit file and it's effect

Hairymonster

Thanks Neil the BR has been off of the report for a number of years so have been gradually getting my CF improved over the years... as I said the only reason it is looking as poor/very poor is the £5k debt I got into for my wedding and Honeymoon. I would imagine this will improve significantly over the next few months as I pay off.

I am also a bit miffed by the credit scoring aspect of my file.... when I first took out Noddle improve a number of years ago I had a score not much lower than what it is currently showing. However nowadays I appear to be able to get higher levels of credit at lower rates of APR... which would suggest my credit file is not as bad....

Which it shouldn't be- since discharge I have always repaid any debt I have had, never went over limits, almost always paid credit cards in full and paid my loans off early so I am a bit miffed as why the "score" looks similar to when I got discharged.

Experian_company_representative

Hairymonster wrote: »

Thanks Neil the BR has been off of the report for a number of years so have been gradually getting my CF improved over the years... as I said the only reason it is looking as poor/very poor is the £5k debt I got into for my wedding and Honeymoon. I would imagine this will improve significantly over the next few months as I pay off.

I am also a bit miffed by the credit scoring aspect of my file.... when I first took out Noddle improve a number of years ago I had a score not much lower than what it is currently showing. However nowadays I appear to be able to get higher levels of credit at lower rates of APR... which would suggest my credit file is not as bad....

Which it shouldn't be- since discharge I have always repaid any debt I have had, never went over limits, almost always paid credit cards in full and paid my loans off early so I am a bit miffed as why the "score" looks similar to when I got discharged.

Hi
Good to hear the bankruptcy is already off your report .

It does sound like it's just you current balance that is impacting on your report. If you are using a high percentage of the credit available to you, then lenders will be concerned that you are relying on your credit to get by.

As you have said- as you pay off your existing balance then your score should start to increase again.

Without a bankruptcy on your report you will probably find that your balances are having a greater influence, while previously the bankruptcy order would have been the most important factor.

Regards
Neil

Nasqueron

Hairymonster - credit scores are meaningless advertising tools used by the Credit agencies to try and convince you to give them money for their "services" to improve the score that they give you.

Banks see a combination of data on your account with 1, 2 or all 3 of the agencies plus they consider your salary and their own internal scoring, they do not see the CRA "score".

Chances are that many mainstream lenders will not touch a bankrupt (at least until 6 years after and it goes off your credit file - does it appear even as a discharge on your Noddle screen? - I don't know how much extra digging they do e.g. into the old registers etc).

Pay off your CC and loans before you think about applying for a mortgage if it will be in both your names, not paying off the CC in full every month + having loans (even with a reason such as a wedding) makes you look like you are living in credit and cannot save / manage finances (not a criticism of you, just how it can be viewed by a 3rd party).

Once your CC and loans are paid off, concentrate on careful spending and paying off the CC every month, ensure all bills are done etc and then see a broker and you should hopefully get a reasonable mortgage offer.

Hairymonster

Nasqueron wrote: »

Hairymonster - credit scores are meaningless advertising tools used by the Credit agencies to try and convince you to give them money for their "services" to improve the score that they give you.

Banks see a combination of data on your account with 1, 2 or all 3 of the agencies plus they consider your salary and their own internal scoring, they do not see the CRA "score".

Chances are that many mainstream lenders will not touch a bankrupt (at least until 6 years after and it goes off your credit file - does it appear even as a discharge on your Noddle screen? - I don't know how much extra digging they do e.g. into the old registers etc).

Pay off your CC and loans before you think about applying for a mortgage if it will be in both your names, not paying off the CC in full every month + having loans (even with a reason such as a wedding) makes you look like you are living in credit and cannot save / manage finances (not a criticism of you, just how it can be viewed by a 3rd party).

Once your CC and loans are paid off, concentrate on careful spending and paying off the CC every month, ensure all bills are done etc and then see a broker and you should hopefully get a reasonable mortgage offer.

Thanks a lot Nasqueron for your good response. Makes a lot of sense and I knew they wouldn't "know" why I was in debt.... just that I was!!! but will be a good explanation to banks if they ask when we do go. I had also read before that the credit "score" is meaningless which adds up when you consider my score is the same as when discharged yet I can get better rates of credit at much lower APR's now.

My BR is completely off of my file and has been for a number of years.

We're not planning on applying for at least a year to 2 years so the debt will be cleared by then.

Do you think I should wait until my debt is cleared before we get a joint account or will it matter much? On one hand not really wanting her to seem to have bad credit by being associated with myself but then again we will be getting a mortgage together eventually so on other hand the longer history together of being model citizens with regards to credit might actually work in our favour?

CLAPTON

you should clear your debts asap (knowing the debt was for an expensive wedding may or may be considered a 'good' reason)
once clear of debt then start saving but keep using the CC but always pay in full


your wife should get a CC and use it regularly but always pay in full and save as much as possible


there are no real benefits to having a joint account at this time so leave things as they are