Good credit and bad credit for re-mortgaging.

loulou16

Me and my husband bought our house two years ago and at the time we both had good credit. Although my husbands credit score has always been better than mine as he works full time and earns more. I've been part time for nearly 5 years as we have two kids, this means my income is lower and I struggle more. Since going from social housing to having our own house this has no doubt proved a struggle, however we manage. We both have our own bank accounts but have a joint account. Each month we pay our share into the joint account which is for the bills. Even though I don't pay as much as my husband I still find It a struggle. I took out a credit card a few months ago so we could do some much needed decorating and in the last few months have really struggled to keep up the payments. This means my credit score has dwindled significantly and Is currently in the 'low category' on Experian. We are due to decide on a new mortgage deal in may, and while I have plans to improve my credit score it's clear that my credit score might not be where it needs to be by may. However my husbands score remains in tact and on our joint account our payments are going out on time. So when it comes to re-mortgaging how will our overall score be looked at? will my own negative score take precedence over my husbands good score??

ACG

Your struggling to pay in the share of the bills you agreed to and then took out credit and in turn increased your monthly commitments... It does not really suggest great financial management when on an underwriters desk. You should be looking at reducing your commitments, not increasing and/or speaking to your partner to see if he can help out.

Thats not me judging you but just trying to point out that when an underwriter looks at it, it is something that may possibly cross their mind.

As far as your credit score goes, ignore it. Its an imaginary score the credit agency gives you, its not worth anything. Each lender has their own way of scoring you.

When lenders score your application, there are tens if not hundreds of different factors that all affect the score the varying degrees. If you have plenty of equity in the house and the affordability (in the lenders eyes) stacks up, then you may have a few options if there is nothing more than the occasional "1" on your report. If you have "2" or "3" on there and are looking at a 90% LTV product then you may find you struggle and your only option is to stick with your current lender and see what they can offer you.

I would get your credit reports and then maybe speak to a broker.

If the affordability is as tight as it seems on your post, then I think you may find you fail the lenders affordability assessments but you can have a play around on their calculators to check that.

loulou16

Thank you for your reply. The likelihood is, is that we will have to stick with Halifax as we wouldn't be able to afford the fee's to switch to another lender. As we already have a mortgage with Halifax are they likely to want to do a credit check and check 3 months worth of bank statements like they did when we applied as first time buyers for our mortgage? or is it simply a case of them offering us a new deal and we switch with a product fee and a bit of paperwork. With regards to equity on our home we are in a really good position. We live in an ex council house in Cambridge with we purchased for £240,000 2 years ago. It is now worth around £280,00. This I guess will boost our chances of getting a good deal?

ACG

You can do a product switch online without speaking to anyone and no further checks I believe. If you wanted to take advantage of the price rises then you MAY have to go through the process and pay for a valuation but I am not sure what the Halifax process is for remortgages.