Does lender need to explain decision to decline?

jab901

Hi,
I recently applied for a mortgage by Nationwide and passed the 1st (decision in principle) and 2nd (approval subject to underwriters) credit checks. I then explained to them that last summer I had a card delivered to a my ex boyfriends house and this could be on my bank address history. They ran a 3rd check on me at that address and later that day my mortgage was declined. Initially i was told this was due to my credit report . I discussed this with the rating company who confirmed I have an "excellent" rating of 990/1000, the only negative factor is that i'm not on the electoral roll. They confirmed that my ex's address does appear on my report but wouldn't alter my score as there's no negative marks there either.
I queried this with Nationwide and was told it was actually their internal score which I failed on and not my credit report but they refuse to give me any more information than that! I simply don't understand their decision and was wondering if i'm entitled to an explanation from them? Currently i don't know what's stopping me from being able to buy a house or how to rectify the problem which is quite distressing!
A bit about my situation:
applied for 10% deposit mortgage but i have access to funds well in excess of this in case of emergency (showed Nationwide these additional accounts)
First time buyer and single applicant
Income of 2.6x proposed monthly repayments
Never used an overdraft or had any debt aside from student loan
have 2 credit cards which are paid off in full each month
I don't understand why they would see me as a credit risk!

Mortgage_Mark_2

Firstly; ignore the credit 'score'. That is simply whichever credit reference agency you used's interpretation of your credit file, nothing more. Until Experian start selling mortgages, it's utterly worthless.

Lenders have far more complex systems that look at the entire history, i.e. the 'meat and bones' of your credit file, plus a whole lot more that you, me and Experian cannot see (google 'Hunter report'). They also look across all credit reference agencies, rather than just one; so it's certainly worth getting a copy of the three main ones, Experian, Equifax and Call Credit/Noddle, in order to see the full picture.

There is 'something' on your file at the old address that has caused an impact on your application. What that is they may not even know for sure, as the mechanics of the decision are not easy to work out.

It may well be something that is nothing to do with you, however by being at the address then you do create a financial link to that property and it is possible for this to then in turn effect your credit rating if someone with whom you have/had a financial link (like an ex-boyfriend) has credit issues.

It's worth a conversation with them to try to ascertain a bit more information as it does seem that, had you not told them, then you may well have 'got away with it' so to speak.

I would be surprised if there is anything that you can do to overturn this decision though unless there's something like identity theft on your file, but it's definitely worth looking into further.

Assuming that nothing changes, I'd speak to a broker ASAP as there may well be a different lender for this, if as you say there's nothing obviously wrong.

Thrugelmir

jab901 wrote: »

the only negative factor is that i'm not on the electoral roll.

It's becoming a mandatory requirement to be on the electoral roll. As it's what ties your credit history together and gives the lender reassurance. Not registering is how people disappear off the radar so to speak.

On a more general level. Lending is a commercial decision. There's no right to credit. Lenders set their own rules when profiling applicants.

stephenni1971

I had a similar case declined for a client recently for little obvious reason. My BDM told me they were likely to internally fail single applicant over 75% LTV unless they they had existing relationship with NW.

Was easy enough to place the client with a company that actually wanted their business...

Thrugelmir

stephenni1971 wrote: »

I had a similar case declined for a client recently for little obvious reason. My BDM told me they were likely to internally fail single applicant over 75% LTV unless they they had existing relationship with NW.

Was easy enough to place the client with a company that actually wanted their business...

Nationwide relies on retail (customer) deposits to fund mortgages. So favours those who use Save to Buy scheme for example. This has always been the nature of Building Societies historically. Preference will be given to those that save with them.

jab901

stephenni1971 wrote: »

I had a similar case declined for a client recently for little obvious reason. My BDM told me they were likely to internally fail single applicant over 75% LTV unless they they had existing relationship with NW.

Was easy enough to place the client with a company that actually wanted their business...

Thanks, may i ask who you tried with after that? I've not used a broker, as comparing my position to friends approved by nationwide i didn't think for a second that I would have a problem!

Would a broker be able to tell me which companys are most likely to take me given the reason for the decline isn't obvious?

Gordon_Hose

How much available on the credit cards? If you don't need them I would close them, or close at least one of them.

Showing available credit is a warning sign that if something goes wrong you could max those cards out in a day and not be able to make repayments on your mortgage.

stephenni1971

jab901 wrote: »

Thanks, may i ask who you tried with after that? I've not used a broker, as comparing my position to friends approved by nationwide i didn't think for a second that I would have a problem!

Would a broker be able to tell me which companys are most likely to take me given the reason for the decline isn't obvious?

On a forum like this I really can't go in to the specifics of lender...