CC Late Payments and Mortgage

Whistler23

(I posted this on the Mortgages thread, and whilst it did open a good discussion no one could answer about the late payments).

Hello kind and helpful people of MSE.

Hopefully a fairly straight forward one for you all on a cold Tuesday morning!

The Girlfriend and I are looking to get a mortgage (I had planned to have applied by now), and I've got a question regarding 2 late payments my girlfriend had on her Barclaycard this time last year. Our daughter was born in November 14 and I insisted my girlfriend had a year off work. She returned to work in November 15. In October we had an idea about asking Barclaycard if they would freeze her payments for a month as we had depleted our savings and it was coming up to Christmas etc.

She phoned them and asked the question and they wanted her to go through Stepchange so we said no, as it wasn't a debt we could pay, we were simply asking a question on what I would call a payment holiday for a month, possibly two just to ease our finances a little. In the end she spoke to someone different at Barclaycard and they offered a re-aging. If I remember correctly it is where they freeze the payment but still charge the interest applicable at that time. So we went for it and all was OK.

Until earlier this year and we decided to look for our own place together. We actually saw a property in July that we really liked and got the Mortgage Adviser attached to the estate agent to apply for a mortgage. We got turned down by Natwest and Nationwide. So after this I started to scrutinize our Credit Files (not sure it was late payment related, there was a lot of information that was wrong on the files, plus we probably had too much debt at the time, the battle we had with Call Credit...dear lord this company should not exist.....)

So fastforward to today. My girlfriend has two late/missed payments on her Barclaycard. I am half tempted to complain, if only so they could train their staff to inform the customer that a re-aging will go down as a late payment.

Her credit file reads
Month | October November December January
Payment | £0 £0 £217 £217
Indicator | 1 2 2 2

So with that, will a lender look at it as no missed payments in the last year (November 16 being month 13) or will we have to wait until January to be the month 13?

What's really frustrating is that we didn't need to actually have the re-aging as we could have borrowed the cash else where, we just didn't want to ask family/friends. If we were aware of the late payment marker we wouldn't have entertained the thought as we had an idea we would be looking to buy a home this year.

Thanks for the help!

(As an update further to the above), she missed the October and November payments, then paid the late payments spread over the next 3 months at a higher amount than her minimum payment). So it was back to normal in February.

[Deleted User]

If the account was in arrears until February, that's the point at which your girlfriend's account management will have started looking reasonable again.

Whistler23

Deleted_User wrote: »

If the account was in arrears until February, that's the point at which your girlfriend's account management will have started looking reasonable again.

Thank you ZX81.

Something else I forgot to ask, I have been looking at the criteria for high street lenders as our Mortgage Advisor doesn't think we will get a high street lender and they generally say 2 late payments in the last 6 months and 3 in the last 12. October's and November's will now be over the 12 month period, so as she made payment in December and January that looks favourable?

Little more info, our combined debt is £7k in loans (me) and £900 on one loan (her). My credit card has a balance but is all work expenses which I am paid back for in 2 week breaks. Her credit card is at £0. We earn about £68,000. Have deposit money and money for fees.

National_Debtline

Hi Whistler23,


When you apply for a mortgage they will assess affordability and credit files. You should ask the mortgage advisor/ banks why you were declined but if everything else is up to date and looks ok, the late payments are the most likely culprits.

Complain to Barclays and ask them to remove the markers. They will only remove incorrect information so you may struggle here. Also bear in mind that several searches on a credit file with no credit can also be damaging, but the searches will normally show for just 12months.


The more recent the information is on a credit file the more damaging it is, so, I am sorry to say, it may have to be something that has to wait. Credit files are updated at least once per month so the October and November payments will be moving further back on the timeline, which is better. I would suggest you seek some financial advice and bear in mind you may have to wait to apply again. Use the extra time to save more of a deposit to get a better deal if you need to.


Laura
@natdebtline

Whistler23

Thank you for coming back on this Laura. The thing that confuses me most is that we don't seem to fit the criteria for an automatic rejection from the lending criteria I googled. I did about 4 or 5 of the highstreet lenders. They say 2 in the last 3 months or 3 in the last 12 (seems odd anyway to say the least...) but we are now 2 in the last 12 months (or none, depending how you look at it as there was payments made in December and January).

I am not sure the late payments would have been a problem in hind-sight. It could be that recently we have paid off a £10k loan, £10k Credit Card and £10k car finance. And my girlfriend wasn't on the ER at our current address and her Call Credit Report was an absolute mess. They basically told us she didn't exist...yet she has the correct information on both Experian and Equifax.

I guess ultimately, what I am trying to find out is if we would be favourable to a highstreet lender with 10% deposit, FTB and a joint debt of £10k with salaries of £65k total. We would like to buy around the £250-£280k mark.

I think ultimately, I just want to know if we would fit

sourcrates

It's a crazy world when you can't get a mortgage on a 65k joint salary.

The only thing I would say is that banks lending criteria is kept a state secret most of the time.

Every bank has different things they look for in a potential borrower, all I can suggest is getting any credit file errors rectified ASAP, give it six months and try again.

Whistler23

Thanks Sourcrates. We've had everything fixed and updated since our initial application on 1st July of this year. The only negative factors on my report (equifax this is, there is nothing on experian) is 4 searches in the last 12 months. 1 was January (car), 1 was a loan in February (still currently have) and the other was I changed from Vodafone to EE. The other was the Natwest mortgage app in July. I haven't missed a payment in nearly 3 years (just the one).

The girlfriends only issue is the late payments 11 months ago. Other than that, all the reports are good reading