Where am I going wrong?

HarlowC

You probably don't have enough of a credit history for them to approve you.

I'd apply for a few more cards and catalogues, spend very little on them and pay back every month on time. This was add loads of green "0"'s to your report and keep a low utilisation.

Don't apply for any more credit after that and then Re-apply after 6 months for mortgage.

Daisy84

Thank you again for all your help. I have looked on Noddle and Experian all my details are the same. I have no financial associates.
My credit card is 0% until next year but I think I will use my savings to clear it. Am I best to close this when I have paid it off or keep it open? I've been employed my whole life (I'm 28 now) but have been in my current role for 4 years. But as I said earlier I have only taken credit (car finance and a credit card) in the last 4 years. Before that I used to save and only spend what I physically had.
I'm privately renting and supporting a child alone at the moment hence me not having that much of a deposit just yet!

Fergie76

I am no expert, but I am not sure not paying your credit card off in full every month is a problem. I think it would be silly to use savings that is gaining interest to pay off a 0% credit card until that 0% runs out.

I have just been approved for a mortgage and I had about £6000 on cards (no other debts) at the time of application and until about a year was only paying minimum payment, so I think it maybe something else that is holding you back.

Superscrooge

Daisy84 wrote: »

Thank you again for all your help. I have looked on Noddle and Experian all my details are the same. I have no financial associates.
My credit card is 0% until next year but I think I will use my savings to clear it. Am I best to close this when I have paid it off or keep it open? I've been employed my whole life (I'm 28 now) but have been in my current role for 4 years. But as I said earlier I have only taken credit (car finance and a credit card) in the last 4 years. Before that I used to save and only spend what I physically had.
I'm privately renting and supporting a child alone at the moment hence me not having that much of a deposit just yet!

As it's a 0% credit card. Not clearing the balance each month is almost expected and so unlikely to have much effect. .

Experian and Clearscore list what they regard as any negatives on your credit file which can sometimes be a useful pointer.

takman

Daisy84 wrote: »

Thank you again for all your help. I have looked on Noddle and Experian all my details are the same. I have no financial associates.
My credit card is 0% until next year but I think I will use my savings to clear it. Am I best to close this when I have paid it off or keep it open? I've been employed my whole life (I'm 28 now) but have been in my current role for 4 years. But as I said earlier I have only taken credit (car finance and a credit card) in the last 4 years. Before that I used to save and only spend what I physically had.
I'm privately renting and supporting a child alone at the moment hence me not having that much of a deposit just yet!

The 0% offer will be visible on your credit report to lenders so they will no penalise you for not paying it off in full. But make sure you pay it off in full before you start paying interest and i can't see anyone considering it a negative which such a small balance compared to your income.

Candyapple

Daisy it would be helpful if you could answer the questions bolded below.

Candyapple wrote: »

How old are you? If you are quite young it could be down to lack of credit history.

What 'pointers' did Equifax give as to the reasons why your score was poor?

Your mortgage adviser should have been more helpful than to point you in the direction of a pointless score that is used for marking purposes by credit reference agencies.

You should open an account with Noddle (Call Credit) and ClearScore (Equifax) both free and then pay £2 for a copy of your Experian report. http://www.experian.co.uk/consumer/statutory-report.html

Check if the info across all 3 is correct. Are you showing as being on the electoral roll on all 3? Is your bank account/mobile phone/credit card(s) etc. all showing across all 3?


Any financial associates on your credit reports?

'Soft' searches have no impact on your credit report. Only you can see them - not lenders, so it won't be that causing any negative factors.

Do you have any closed accounts on your reports? Some lenders like to see a history to see how you've run accounts in the past.

Have you been in your job for long?

Could the issue be affordability? If you're earning £38k, you're bringing in roughly under £2.5k every month. Which begs the question, why the low deposit?

Are you applying for the mortgage alone or with a partner? If with a partner, do they have a poor credit history?

If you are a single parent, your child will be a big factor in the reduced amount of money the bank would be willing to lend you.

Your car finance and credit card balances are so low that they would barely impact your application so there is something else on your files that you are not telling us.

You mentioned that you have checked your Noddle and Experian and in the first post you mention Equifax - what are the negative reasons given by them all as to why your 'score' is low?

Did you go with a broker or make a direct application with a bank for the mortgage?

Have you actually spoken to your mortgage adviser since to ask if they can clarify further why your application failed?

Daisy84

The negative reasons are being on the electoral roll for less than 3 years at my current address ( I will have lived at my current address for 3 years in October) and also 'credit card utilisation'. Even though I am still on the promotional rate and my current balance is well below the limit.
I do have one closed account from 2013 when I took out a credit card and never used it so I closed it. All electoral roll, mobile phone, finance etc is all the same on all credit reports.
I applied directly with the bank. Which I am now finding out is a big no no.
When the application was rejected, the mortgage advisor just said it could be because of the 'soft searches' on my account which I didn't think lenders could see. Also that said it could be because I went into my overdraft last November. They even commented that they couldn't understand why it hadn't gone through as the bank was offering me credit cards/ loans etc all the time.

Thrugelmir

Daisy84 wrote: »

I'm privately renting and supporting a child alone at the moment hence me not having that much of a deposit just yet!

What's the cost of your childcare provision? This is going to impact affordability calculations.

Daisy84

I currently pay £110 per week. However this will stop next month as my mother has retired and wants to take care of him as she wants to help me get our own home.
However this was taken into consideration when I applied for the mortgage.

Ben8282

Soft searches on your credit report cannot be seen by lenders and therefore cannot have influenced the decision. The bank employee is talking out of the back of his neck. This does not surprise me. A couple of years ago a bank employee told me that my loan application had been refused by Experian, not them!
I am curious how you managed to take out the credit card in 2013 without being on the electoral roll and why you chose to close it without ever using it. If by any chance the card was taken out with the bank that you have applied to for a mortgage, it is possible that that is the real reason for the refusal of the mortgage; that they see you as a timewaster.
It is possible that the use of your overdraft last November could have caused them concerns about ability to repay, but if this was a short one-off use it would appear a bit drastic.
My feeling is this refusal was caused by a combination of factors rather than a single factor. The short electoral roll history, the single low-limit credit card, the lack of any credit history beyond 4 years etc
The closed never-used credit card account could also be raising questions as to why it was never used and so quickly closed. This could be being interpreted as lender opened credit account for you then quickly reversed their decision for some reason and closed it on you.