Credit Rating Excellent but 1-2 red flags - Will I still get a mortgage?

fryerrobin

Ok, so

- Applying for a high LTV mortgage (5% deposit).
- Credit score experian = 999/1000 (Excellent)
- Credit score equifax = 507/500+ (Excellent)
- 1 defaulted payment of £25 in 2011 (which still appears on my credit report and I am contesting currently because it should have been settled and still shows a defaulted balance of £25).
- 3 late payments elsewhere but over 28 months ago.
- Buying with my partner who also has excellent rating on both measures above.

Is there still a risk I could be turned down despite having an excellent credit rating?

I will pass the principal offers because all they check is score, but wondering if I will been rejected on full application because of some of the factors above?

I am hoping not since the defaulted amount is
1) Being contested and therefore can't be taken into account by a lender.
2) The defaulted amount is very small.
3) Have made dozens of successful on time payments much larger than the value of any missed or defaulted ones which shows I am in fact a reliable payer (at least now I am!).

Has anyone here ever been rejected a mortgage despite have 'Excellent' credit rating?

amnblog

fryerrobin wrote: »

Is there still a risk I could be turned down despite having an excellent credit rating?


Has anyone here ever been rejected a mortgage despite have 'Excellent' credit rating?

Yes and Yes


I have a client with three four figure CCJ's on his record who still has a '999 Excellent score'


The score on your credit report is just a marketing exercise - lenders work on the data within.

brettcta

ignore the experian & equifax scores - you can obtain them by asking someone you don't know to write a number down between 1 - 999 and it'll be as accurate as experian.

fryerrobin

amnblog wrote: »

Yes and Yes


I have a client with three four figure CCJ's on his record who still has a '999 Excellent score'


The score on your credit report is just a marketing exercise - lenders work on the data within.

Ok, I have no CCJ's and the only defaulted payment was 2 figures (£25) hardly 4 figure? Are we talking a big risk for this kind of history?

fryerrobin

brettcta wrote: »

ignore the experian & equifax scores - you can obtain them by asking someone you don't know to write a number down between 1 - 999 and it'll be as accurate as experian.

The lenders definitely used them though, my first principle application was turned down because the information on equifax was out of date. After updating it went from poor->excellent, purely on the basis that they hadn't updated the fact I was on the electoral role.

Dave_Ham

You are not listened to what you are being told, or this is a wind up thread.


The numbers are completely irrelevant, the data in the reports however is crucial.


Experian/Equifax just put their interpretation into the numbers in order to get people continuing after the free trial.

fryerrobin

Dave_Ham wrote: »

You are not listened to what you are being told, or this is a wind up thread.


The numbers are completely irrelevant, the data in the reports however is crucial.


Experian/Equifax just put their interpretation into the numbers in order to get people continuing after the free trial.

Ok I get it.

But based on the information I gave above would you say the banks are unlikely to lend to me.

If they do as you say look into the detail of the data with in the report, then are these small sums of money a risk?

My car credit which I have paid without fault for 2 years for 8xthe value of the £25 defaulted payment is small), would this demonstrate to a lender that I am indeed capable of paying back credit details on time?

Dave_Ham

Most of the lenders work on an automated scoring basis. This will be scored on their algorithms and not the same as Experian/Equifax et al.


A default (no matter how low value) will have a detrimental affect on this automated score for yourself, especially with a 5% deposit.


I would say this is borderline and lender selection is crucial.

amnblog

as is listening

Mortgage_Mark_2

You: It's only £25, it's nothing

Underwriter: If it's 'nothing' and 'only £25' why didn't you pay it?

Forgive the flippancy but THAT is how an underwriter will see it, forget the amount of the default, it's a bad sign. This is the sort of case that is ripe for a broker as they can guide you in the direction of a lender who credit searches instead of credit scoring, whereby that 'only' £25 could be the difference between a yes and a no.

fryerrobin

Mortgage_Mark wrote: »

You: It's only £25, it's nothing

Underwriter: If it's 'nothing' and 'only £25' why didn't you pay it?

Forgive the flippancy but THAT is how an underwriter will see it, forget the amount of the default, it's a bad sign. This is the sort of case that is ripe for a broker as they can guide you in the direction of a lender who credit searches instead of credit scoring, whereby that 'only' £25 could be the difference between a yes and a no.

Ok thanks for the info.

So your saying that the best chance I have is to go with a broker?

I am already using a broker and he has managed to get me a mortgage in principal.

Is this just simply a case of asking my broker to select a lender based on as you say "searching rather than scoring"?

Will it make any difference in a full application? Surely the underwriter will still look at my credit history and see the blot and could knock the mortgage on the head?

I suppose the easiest question to ask is Has anyone ever had a mortgage offered with a credit history like mine?

Furthermore what can I do to correct it, if as most people are saying here the score means nothing? Therefore any attempts to improve my score are fruitless and basically there is nothing I can do to get a mortgage???