Credit score of 587 and got denied for mortgage

skywalker007

Hello

I need the experts help here. I check my credit report on noodle and i have 587 and 3/5. The only negative thing on my report is that it says limited time on electoral role as i have registered for 6 months. I applied for a Mortgage in principle from halifax and i got denied.

i don't have credit cards and i have two direct debits on my account.I have never owed anyone or lender any money.

Please can someone explain why i was denied. Also will it affect me if i try at another lender?

Any reason why my credit is that low? i know people not on electoral role and no credit card and they have good credit

thanks in advance

creditbuilderlee

Hi

It is frustrating and we all know how it feels to be declined (I do anyway hence why im here)

When you say you don't owe anyone or ever have etc do you mean you haven't got any open lines of credit etc?

Age and previous history of ability to pay back are a factor so like me before i had a little blip i had credit cards and loans that i never missed a payment and my credit rating (NOT SCORE - IGNORE THIS AS ITS POINTLESS AND A MONEY MAKER FOR THE CRA) was red hot.

I could walk into anywhere and get credit because my file showed lots of greens and no defaults/ccjs etc etc

matttye

Ignore the numeric credit scores as they are just the credit reference agencies' opinion of your creditworthiness but they're not the ones who lend you money.

You need to focus on the information in your credit reports. You should check your Equifax and Experian reports as well, but pay £2 for the statutory reports - don't sign up for any services.

The three different agencies can hold different information about you as some lenders only report to some of them.

skywalker007

Thanks for your help guys. I asked for a mortgage of around 140k. I definitely check with experian and equifax and my salary is around the £31000k . i though they should be able to just tell me how much they can borrow rather than asking how much i want

Now that they already ran a credit check on me,will it affect me if i go to another lender next week?

skywalker007

This is strange. noodle says 587,just checked through experian and it says have a score of 900 and it shows in Experians that halifax did a credit check on me. still baffled as to why Halifax denied me.

Lungboy

skywalker007 wrote: »

Thanks for your help guys. I asked for a mortgage of around 140k. I definitely check with experian and equifax and my salary is around the £31000k .

Don't most places only lend 4x income?

forgotmyname

How much of a deposit do you have? How much do you save every single month without fail?

They wont tell you how much you can borrow. You should have an idea of what your going to buy and how much it will cost and whether you can afford it.

The scores your getting are pointless. My free scoring system rated you 3 custard creams and a digestive. Which means just as much as the scores you paid for.

Bit like going into the Ford dealer and asking how much the Kia garage down
the road will knock off the price of a car.

The credit agencies dont lend you the money so their scores are a waste of time.

skywalker007

Lungboy wrote: »

Don't most places only lend 4x income?

Yea i think around 4.5 but halifax asked me how much were the price of the house i was looking at and i said 140000. I thought they should tell me exactly how much they will be able to lend me which was the reason why i wanted to do the agreement in principle. They did not ask how much deposit i had.

@forgotmyname. I thought that's the reason why i am applying.So they can tell me how much they lend me. I think most first time buyers need to know so they can look for the price of house around the range the bank can lend + deposit. i might be wrong but the reason went to halifax was for them to work out the maximum they can loan me.

Caz3121

skywalker007 wrote: »

I asked for a mortgage of around 140k. I definitely check with experian and equifax and my salary is around the £31000k .

skywalker007 wrote: »

Yhalifax asked me how much were the price of the house i was looking at and i said 140000.

these are different things,
It is strange they did not ask what deposit you had as otherwise how would they know what the LTV would be

Asking for a mortgage of £140k on a house worth £155k would have more risk that a mortgage of £140k on a house worth £300k

Likewise if you said you were looking at the £140k mark and they not ask what deposit you had, you may have £70k so are looking for a £70k mortgage which would have lower risk that wanting a £130k mortgage on a £140k property

how much deposit do you have?

skywalker007

I am a first time buyer looking to use the help to buy scheme. I have 10K as deposit

Update: Just checked again and noticed my two bank accounts and direct debits are not showing on Experian.Is this normal or an error?

thebritishbloke

skywalker007 wrote: »

I am a first time buyer looking to use the help to buy scheme. I have 10K as deposit

Update: Just checked again and noticed my two bank accounts and direct debits are not showing on Experian.Is this normal or an error?

No, it's normal for some accounts to not show on your credit reports. Direct debits are nothing to do with your credit report.

If you've never had any credit before, i.e. credit cards, loans, mobile phone contract etc, then how is a lender supposed to know whether you're trustworthy with their money? They need to see an extensive history before they'll be willing to part with £140,000.

Get a credit card, set up a direct debit to pay it in full every month and try again in 6-12 months time.