AP possibly affecting Mortgage App

BaggyNeil

Hi Guys

New to the forum, so hello!

Currently looking to source a new purchase mortgage, and had narrowed the choice of with HSBC and Leeds BS.

Just to be sure there were no issues with the applications I signed up to Experian and Equifax to take a look.

Experian 940 Good / Equifax 463 Good - so naturally didn't think I would have any problems moving forward.

Went to see HSBC on sat, they did a very quick check and gave us an AIP - then spoke to Leeds this morning who said they would run a check for an AIP.

They called back to say I had been declined due to adverse credit on my Equifax report, she couldn't go into detail over the phone, but I explained about my scores and she asked me to send them through and she would take a look, I also asked for some feedback to point to what she thought was the problem.

Now I can't see anything untoward except for an AP on my NatWest Current account from 2012 - the circumstances are NatWest was my main current account and I always had an authorised overdraft of £500 - In early 2012 my partner and I decided to use her account as a joint account (HSBC) so all my salary went there. I didn't automatically close the NatWest account as I thought you never know! I was still being charged for the advantage gold fee and interest on the authorised borrowing, then I received a letter from them asking me to get in touch about unauthorized lending, turns out the account had gone over the £500 limit and charges were being added. I got in touch with NatWest and they took me off advantage gold, and refunded the charges and then I set up a direct debit to clear the account.

So the question is, how likely is that is the actual issue, and how do I get that corrected, also will HSBC look at that too with a full application and think it's an issue also.

Any help or advice would be hugely appreciated

Neil

thebritishbloke

That probably is the issue, as you'll have a default and an arrangement to pay on your account. You'll be better off posting on the Mortgage part of the forum to get some better answers.

A mortgage broker will be your best shot at getting a mortgage.

Have you settled the account now? If so, when? It should start to show as settled within a couple of months of paying it off.

Malmo

BaggyNeil wrote: »

Now I can't see anything untoward except for an AP on my NatWest Current account from 2012 - the circumstances are NatWest was my main current account and I always had an authorised overdraft of £500 - In early 2012 my partner and I decided to use her account as a joint account (HSBC) so all my salary went there. I didn't automatically close the NatWest account as I thought you never know! I was still being charged for the advantage gold fee and interest on the authorised borrowing, then I received a letter from them asking me to get in touch about unauthorized lending, turns out the account had gone over the £500 limit and charges were being added. I got in touch with NatWest and they took me off advantage gold, and refunded the charges and then I set up a direct debit to clear the account.

So the question is, how likely is that is the actual issue, and how do I get that corrected, also will HSBC look at that too with a full application and think it's an issue also.

Any help or advice would be hugely appreciated

Neil

Hi Neil,

Going by your description of circumstances, the AP (also known as AR) marker factually represents how you managed and ran the current account and is likely the reason for the decline. This manifested itself by you and the lender agreeing a temporary change in terms, resulting in an Arrangement to Pay marker being applied to each month that the changed terms were in force. I very much doubt the lender will remove the marker as there doesn't seem to be an error on their part, based on what you describe.

Such markers are adverse and will affect your ability to obtain credit (the markers roll off after 6 years).

Refer to section 3 of this document that describes the Information Commissioner's Office principles on such arrangements.

Nasqueron

BaggyNeil wrote: »

Experian 940 Good / Equifax 463 Good - so naturally didn't think I would have any problems moving forward.


They called back to say I had been declined due to adverse credit on my Equifax report, she couldn't go into detail over the phone, but I explained about my scores and she asked me to send them through and she would take a look,

Neil

Neil - scores are meaningless - it's the data that is the question - do Experian or Equifax lend you money? No - so who cares how they "rate" you?

Your high score even though you have this arrangement proves they are nonsense.

Don't pay for any sort of monthly sub with any of the 3 credit agencies (Noddle / Call Credit is the other)

BaggyNeil

Thank you all,

I have had a bit of feedback,

The woman from Leeds suggest that it was a late payment on a store card 13 - 24 months ago, there is a orange flag up on 1 late payment, but I'm still supprised that has made such a big impact. However she did say that as we are looking for a 95% LTV they do have strict lending criteria, but even so...

Neil

Candyapple

BaggyNeil wrote: »

Thank you all,

I have had a bit of feedback,

The woman from Leeds suggest that it was a late payment on a store card 13 - 24 months ago, there is a orange flag up on 1 late payment, but I'm still supprised that has made such a big impact. However she did say that as we are looking for a 95% LTV they do have strict lending criteria, but even so...

Neil

So do you have an Arrangement to Pay marker on your credit file for your Natwest account when you expand into it or not?

BaggyNeil

Candyapple wrote: »

So do you have an Arrangement to Pay marker on your credit file for your Natwest account when you expand into it or not?

Yes, on Equifax Sept 2012 AP

But, nothing showing on Experian, all green...

Candyapple

Is your Natwest account showing on your Experian file?

If yes and you have no AP marker on there, you need to contact Natwest and ask them to remove the incorrect data from your Equifax file.

However, you do run the risk of Natwest looking at your request and deciding that the AP marker on your Equifax file is correct, and add the AP to your Experian file too.

Arrangement to pay markers are worse than defaults:
https://forums.moneysavingexpert.com/discussion/4475265

BaggyNeil

Candyapple wrote: »

Is your Natwest account showing on your Experian file?

If yes and you have no AP marker on there, you need to contact Natwest and ask them to remove the incorrect data from your Equifax file.

However, you do run the risk of Natwest looking at your request and deciding that the AP marker on your Equifax file is correct, and add the AP to your Experian file too.

Arrangement to pay markers are worse than defaults:

Natwest does show up on Experian, but nothing on there, I still maintain that my circumstances meant there should not be an AP on there, I literally got in touch when it went over the 500 limit and told them I would clear the overdraft via DD.

Using the info on this forum, the other prefered mortgage deal was with our bank HSBC, they seem to only use Experian for mortgage applications, would this then not matter to them as it doesnt show up?

I have just checked and we do have an AIP with HSBC, but don't want to proceed with the full application if the AP marker on Equifax could cause a problem.

Thanks again for all your help

Candyapple

http://www.moneysavingexpert.com/credit-cards/credit-reference

HSBC appear to only search Experian for mortgages so looks like you'll be ok if you went with them.

I would still try to get rid of the AP from the Equifax file with Natwest as if you want to apply for credit in the future it may prove troublesome, as you are finding out now with the Leeds mortgage company.