Are trace enquiries visible to mortgage lenders?

jivebunny

Hi all,

I've just applied for a mortgage and my broker got back to me to say that following the credit check they could only loan me an 85% on the house rather the 90% I'd asked for. I can't afford this so we're going to try another lender.

The broker says not to worry and that it could be some minor anomaly on my record. Earlier this year I was approved for a mortgage from another bank on a purchase that I eventually pulled out of. The last time I had checked my credit report it seemed fine. Everything was 'green' so to speak and seemed pretty good to me.

In light of this I've checked my report again using Equifax and there were two trace enquiries in May of this year by '1st Locate (Uk) Ltd - Bg T&C'. Turns out it's some debt collection agency (I don't have any debt :huh:).

I noted they were based in Leeds after some serious digging I think I've come up with the cause: I am a member of a car hire scheme but I've used it only a handful of times in four years. Normally there is an annual subscription but because I was with a company they took over years ago I don't have to pay this.

I used it a couple of time earlier this year and I recall getting a phone call from them telling me my bank details were wrong. They had my old bank details and had been sending me invoices which I wrongly assumed were being paid. On hearing this I just paid them over the phone and didn't think anything of it.

Turns out before thinking of calling me on the number they've always had (admittedly the address was old) they had this debt collection agency try and track me down.

So will mortgage lenders be seeing these trace enquiries? Am I correct in thinking this could be the reason they changed their lending terms?

Is there anything I can do to get rid of it?

I've been searching for a house for 9 months and this one's great. If I lose it due to a £29 bill which went awry 8 months ago I seriously think I'll give up.

Thanks

Tixy

No, any potential lender searching your file would not see these searches of your file.

jivebunny

Thanks. I've called 1st Locate and they have confirmed lenders do not see these on your file. Likewise the car hire company says they do not use this company and see no reason on my record why any type of debt collection agency would have been used on my account.

After initial searches 1st Locate couldn't see my details anywhere in their system and have referred it to a team for further searches. If they don't see any record they said they'll request to have it removed from my credit report.

So for mortgage applications the trace enquiry shouldn't matter. However, I've just been refused from a second mortgage application stating I've failed the credit check (affordability was fine). This is the bank I was offered a mortgage with, no problems, 6 months ago. Something has happened since then and I don't know what.

I have an excellent credit rating with a decent credit history, I'm on the electoral register and I've been in my current house for over three years. I've got £5K total available credit (none of which is used) and there is not a single late payment across the entire report. Everything is green.

I've forwarded my report to my mortgage broker with a report from the previous year and there is no major difference. I still have an association with an ex on there but she is well paid, from a fairly rich family (who would cover her) and was always reasonable with money. I'll fill in the disassociation forms today but it seems highly unlikely she is the cause.

Are there any recommended services available who can indicate potential problems from a credit report?

Thrugelmir

Mortgage lenders will offer you what they consider affordable. In addition lenders will have their lending policies at any given point of time. There's no right to credit. Little point therefore in crawling over your credit file. Boost your income or save more to buy the property you aspire to.

Tixy

Something has happened since then and I don't know what.

If there are no obvious changes to your financial position or your credit file then it may well be that the lender who offered you a mortgage before has changed their lending criteria for the product you were applying for or possibly the way they assess risk or affordability.

That said definitely not a good idea to keep any ex financial associate on your file any longer than you have to.

If everything on your files is correct then there is no point paying any service for anyone else to look at it.
You have presumably got copies of your credit files from all 3 agencies?

kingstreet

Your lender may have a reduced appetite for higher risk 90% business this close to the year-end.

So, the credit score required is tweeked and only 85% cases are allowed through.

Do the same application on 1 January and you may get a different result...

jivebunny

Thanks for the replies. Just to confirm these refusals are at the credit check stage i.e. the broker puts my details in and 'computer says no'. The lenders have't seen any of my bank statements yet.

The broker says when my numbers are put into the system the minimum term it would offer in order for it to be classed as affordable is 17.5 years and I'm asking for a 30 year mortgage, so there should be a fair bit of leeway.

I've checked my report on Call Credit and that's fine (no ex as an associate on that one OR the trace enquiries). Just waiting to get access to the report on Experian and to see if my broker has any thoughts.

Thrugelmir

jivebunny wrote: »

The broker says when my numbers are put into the system the minimum term it would offer in order for it to be classed as affordable is 17.5 years and I'm asking for a 30 year mortgage, so there should be a fair bit of leeway.

Lenders are required to assess affordability at 7% interest rates. There's huge complacency after years of ultra low rates. One day rates will normalise, many people will be in for a shock. Particularly if the term is extremely long at the outset. Hence why affordability tests were set in this manner.

jivebunny

Thanks for the replies.

I've just contacted the Trace Enquiry company again and they've now confirmed that lenders DO see these traces. He's also said he can't find any record of the enquiry on their system so he's going to send Equifax a request to remove it. He expects this to be done by Tuesday and he'll email me when it's done.

Not sure whether that's the cause or not but it's certainly a possibility.

Tixy

jivebunny wrote: »

I've just contacted the Trace Enquiry company again and they've now confirmed that lenders DO see these traces.

I would ask the credit reference agencies as to whether these searches could be seen by a potential lender searching your file. They are the people who will give you the correct answer.

For equifax https://equifaxuk.custhelp.com/app/answers/detail/a_id/98/session/L3RpbWUvMTQxODM4NzQ4NS9zaWQvbDlqOHhJOW0%3D

When lenders look at your report, they can see any previous credit-application searches that resulted from you applying for credit. They are allowed to use these searches to help make decisions about you, normally when calculating your credit score. Other types of searches are not normally visible to them and do not affect your score. You can check your own report as often as you wish and this won't harm your credit rating.

MABLE

jivebunny wrote: »

Thanks for the replies.

I've just contacted the Trace Enquiry company again and they've now confirmed that lenders DO see these traces. He's also said he can't find any record of the enquiry on their system so he's going to send Equifax a request to remove it. He expects this to be done by Tuesday and he'll email me when it's done.

Not sure whether that's the cause or not but it's certainly a possibility.

The credit reference should once it has been removed contact any recent companys who have searched your file to make them aware it has now been deleted.