Will be applying for Mortgage - But had Pay Day Loan in 2013 - will it affect me?

yessuz

Hi,

Question is really straight forward:

I will applying for mortgage soon.

I have 0 in debt (all credit cards paid, etc) for a year or so.

My credit score on Experian shows "good", and in the ClearScore - 500 (indicating as Soaring High, LOL).
I have got AIP LLoyds 3 months ago (and it expired, but no circumstances changed, so I think I should get it re-newed, Also I would borrow significantly less than AIP claims I could borrow.

anyway - in January 2013 I took a PDL and settled it down on time. Never had other Pay Day Loans after that... so 3 years passed since then..

will this affect my future mortgage application??

Bravestar

yessuz wrote: »

Hi,

Question is really straight forward:

I will applying for mortgage soon.

I have 0 in debt (all credit cards paid, etc) for a year or so.

My credit score on Experian shows "good", and in the ClearScore - 500 (indicating as Soaring High, LOL).
I have got AIP LLoyds 3 months ago (and it expired, but no circumstances changed, so I think I should get it re-newed, Also I would borrow significantly less than AIP claims I could borrow.

anyway - in January 2013 I took a PDL and settled it down on time. Never had other Pay Day Loans after that... so 3 years passed since then..

will this affect my future mortgage application??

Ignore credit scores - they are just a number and mean nothing, except possibly the entity that awarded you that number.

A PDL will show on your credit file, and certainly not assist you in getting any form of loan/credit. Whether it stops you getting a mortgage will depend on all the other circumstances.

See a mortgage broker that specialises in applications by those with adverse credit history.

Alternatively, the PDL entry should disappear from your credit file after 6 years.

yessuz

so, you say that one thing 3 years ago is automatically "adverse credit history"?

in this case, does AIP mean anything?

Experian_company_representative

Hi Yessuz,

Our Ask James page covers this question in detail here, you may find it useful.

As the pay day loans are not recent and as long as they were all kept up to date we would not expect them the cause any issues when applying for a mortgage.
Kind regards
Neil

Bravestar

yessuz wrote: »

so, you say that one thing 3 years ago is automatically "adverse credit history"?

in this case, does AIP mean anything?

See the MSE article I linked to in the other thread you posted in

8.Payday loans can hit your ability to get a mortgage - even if paid on time

Since I've even known actual mortgage offers be withdrawn before release of funds (even after a buyer has exchanged contracts! :eek:), and an AIP when we were given it was simply a signed scrap of paper by some spotty kid in an estate agency after a 15min chat about finances (although I think it means a little more today), an AIP, imho, means very little, sorry.
Although a lack of one can have an adverse influence to any vendor.

yessuz

interesting. article talks about regular PDLs. my case is - single, one off instance - 3 years a go.

of course, I would not be able to remove it from my credit report... do any comments/notice help if any, or do underwriters check that and/or ask the reason etc.?

we are going as first time buyers - this would probably make it even worse..

p.s. AIP was provided by bank manager in local lloyds branch so imho that's a bit other situation than the spotty kid in estate agency after 15 mins chat.

of course, the brokers should be more aware, which lenders are better and which are worse in such situations?

Lemonsqueezer78

A single PDL made 3 years ago and paid off with no issues - and no other problems on the credit file - is not likely to result in that many issues getting a mortgage in my view.

A normal broker, if you provide them with all the facts and info, is likely to be able to help you with this I think. No need to see anyone specialist at this point.

kingstreet

yessuz wrote: »

Hi,

Question is really straight forward:

I will applying for mortgage soon.

I have 0 in debt (all credit cards paid, etc) for a year or so.

My credit score on Experian shows "good", and in the ClearScore - 500 (indicating as Soaring High, LOL).
I have got AIP LLoyds 3 months ago (and it expired, but no circumstances changed, so I think I should get it re-newed, Also I would borrow significantly less than AIP claims I could borrow.

anyway - in January 2013 I took a PDL and settled it down on time. Never had other Pay Day Loans after that... so 3 years passed since then..

will this affect my future mortgage application??

No it won't.