Effect of very very old debts on mortgage application

jen_79

Hoping someone can help

I had some debt with Halifax around 12 years ago that it transpired I'd forgotten about when I left the country. They sold it to Equidebt about 10 years ago and it fell off my credit file, possibly around 4 years ago after the 6 years. It was maybe around £4K or so.

I'm worried if I ask Halifax for a mortgage, they will look me up on their system. Best case scenario is they say no to giving me a mortgage, worst case is they get back on my case about the debt. I could pay it but that would eat into my deposit.

Does anyone know how debts like this are treated by banks? I've not had anything bad on my credit report since it dropped off but I'm guessing their own internal computer system could look back much further.

amnblog

You have just about summed up the position yourself.

simpson_77

Don't apply to Halifax. Simple

jen_79

OK thanks everyone, so best just to assume Halifax's computer can remember me?! I was hoping it might have forgotten me because a credit report wouldn't help refresh its memory

AliceBanned

I was offered a mortgage by Santander despite bad debt over 8 years before with them (at the time Abbey National). If your situation has turned around since then I doubt it would have an impact. I don't think they can ask for it back as it is statute barred after six years. It depends on your current situation but it might be best to go to a mortgage broker.

jen_79

Thanks. Halifax are offering the right amount of money for my circumstances (based on their calculator) which is why I'm particularly interested in them but perhaps a mortgage broker can find me something different, making my issue moot.

fewcloudy

jen_79 wrote: »

Thanks. Halifax are offering the right amount of money for my circumstances (based on their calculator) which is why I'm particularly interested in them but perhaps a mortgage broker can find me something different, making my issue moot.

And once again, I think you have realised the best next step yourself...

fc

Thrugelmir

jen_79 wrote: »

Does anyone know how debts like this are treated by banks?

Historical data retained varies from lender to lender. But the general rule remains the same. A blacklist of customers will be maintained. While detailed data is only held 6 years. No business wishes to deal with a customer that's previously defaulted. Think of it as lending £20 to a mate. They never pay you back. 10 years on they wish to borrow £100 from you . What would your reaction be?

jen_79

fewcloudy wrote: »

And once again, I think you have realised the best next step yourself...

fc

Haha, thanks, a quick sanity check always helps.

jen_79

Thrugelmir wrote: »

Historical data retained varies from lender to lender. But the general rule remains the same. A blacklist of customers will be maintained. While detailed data is only held 6 years. No business wishes to deal with a customer that's previously defaulted. Think of it as lending £20 to a mate. They never pay you back. 10 years on they wish to borrow £100 from you . What would your reaction be?

True, I guess I was interested if this is a practice banks/lenders would use - I know it makes sense but sometimes the law (DPA or whatever) prevents such things.

Thrugelmir

jen_79 wrote: »

True, I guess I was interested if this is a practice banks/lenders would use - I know it makes sense but sometimes the law (DPA or whatever) prevents such things.

No detailed data is retained. Simply a list of customers with a "do not deal" with again label attached. Good solid business practice that's as old as the hills. Technology has made it easier to monitor. There's no contravention of any rules or laws. As purely a commercial decision.