Will old defaults ruin mortgage application

Stace255

Hi there. I am looking for some advice.

My partner and I are looking to buy a house and the end of the year.

We checked my partners credit score and he had two closed accounts which are showing as defaulted.

The accounts defaulted in 2010 and were paid off in full in November 2015.

Will these accounts be removed from his file when it reaches 6 years from the default date or will they still show until November 2021?

If they are removed this year, does this mean that his credit score will start to improve? I know a credit score is not all lenders look at but they certainly will have an impact.

He is now using a 'builder' credit card which is paid in full each month.

Many thanks

fermi

The accounts will be removed 6 years from the original initial recorded default date, no matter what.

Scores are a fiction/marketing ploy, but each prospective lender will no longer see any trace of the defaults, and will not know from your report that they ever existed, so will judge you on what they can see from then onwards,

banks4u

I had defUlfs from 2012 which I cleared last year and got a mortgage via Halifax

J_blondie

Defaults affected my mortgage application albeit every situation is different the older they are and if settled will be the decider for you. Also deposit and every other factor like employment etc

Stace255

Thanks all for your advice and comments.

This has just made me think though (not that I am complaining as it seems to be good news for us).

As he defaulted on accounts, lenders will see no trace of it after 6 years so 2016. However say if he had never default on the accounts but had frequent late/missed payments (up until June 2015 for arguments sake) and settled the account in November 2015, then lenders would be able to see details of these missing/late payments until 6 years from June 2015.

Seems odd as a missed payment is not as bad as a default but the impacts can last longer!

fermi

Yes, it is a strange way to do things, but it would work like that.

It's why when people are on something like a long terms debt management plan, it's usually better in the long term for defaults to be marked as such as soon as possible.

Stace255

Thank you so much. This has put my mind at ease. Looks like we will only have to push back buying by a few months rather than years! More time to build that deposit! :j