Mortgage Broker and damaged credit file

kay159

Can anyone offer any advise on the following
My daughter and her partner have recently applied for their first mortgage
He is working, she is disabled - they wanted a low amount on a help to buy property
The broker had all of their details and ran affordability checks which stated they could borrow £30k over what was needed
Both looked at credit files. Her partners is squeaky clean, my daughter had a default from 2013 for £116 which was settled in full. Neither has any credit and both are up to date with bills on their rented property
The main issue other than the default was the fact that when they moved despite sending the forms off for electoral roll and subsequently someone coming to the door last year to chase (which should in hindsight have rung alarm bells) they were not added to the electoral roll. They have corrected this with the council and will be on the April update but this wont feed through to the credit agencies for a few weeks
The broker was fully aware. Before he ran the offer in principal it both the default and the electoral roll situations were discussed at length. The broker told her he had spoken to the bank and it was not an issue
Then he ran the search with the bank. It came back declined and their credit scores were reduced by half.
When my daughter questioned the reason for the decline she was told it was due to the credit report and went on to deny knowledge of the issues with the electoral roll, had never spoken to the bank as it transpires and just run through the banks online system
Now the situation is that there scores show they have both made too many applications for credit. The broker advised that having a credit card may help but the score seems to negate this especially until the electoral roll shows correctly and personally I would not now trust a word he says
Having read a few posts on here it appears that the electoral roll was the major problem and the application should not have been submitted until it was corrected on the credit reference agencies files
Has anyone any experience of something similar, how long do the credit searches stay on file, how soon after the credit file is updated for the electoral roll entries could they realistically reapply, would the default mean an instant decline and would they be better going to the actual branch to discuss in person
Also would a credit card with a small balance really help if they opened soon and spent a small amount and paid it off each month or is this something that would make no difference
Sorry this is quite lengthy but my daughter and her partner are distraught and are worried that in running the application when they were not on the electoral roll this means they will be left in rented property indefinitely. They are trying to save a larger deposit but the rental rates in our area are around 1/3rd higher than the cost of buying would have been so the sooner they can move onto the proprty ladder the better
If it helps the bank was Nat West and a Help to Buy Property - the broker advised 95% LTV as an alternative are very hard to achieve currently so what LTV is realistic
Thanks

ACG

I do not think the electoral roll is a deal breaker, it sounds like a combination of everything which is frustrating as it makes it easier if there is a specific issue to overcome.

There are lenders who do not credit score, so it might be worth looking at those lenders. I would not rule out getting a Mortgage now based on what you have said, but we only have limited information to go off.

kingstreet

Please, please, please do not get hung up on these numbers peddled by the Credit Reference Agencies as "credit scores" as they have no significance whatsoever in securing a mortgage.

Thrugelmir

Have they registered on the electoral roll previously? Continuity counts.

ap1985

To me it sounds like you need to take the advise of another mortgage broker. I would highly recommend a second opinion but the decline initially could have been due to many factors not just the factor of the electoral roll registration.

minimike2

"Their credit score reduced by half" - No, it didn't. No one has a "credit score". As Kingstreet says, the numbers are insignificant and lenders do not see / use them in credit assessment. What they do use is the data held on the credit records.

They simply haven't met the banks own internal credit scoring. Sometimes cases look on paper like they should be fine but end up failing "credit score" with the lender. Since it is usually only a handful of people in any lender who know what that scoring criteria is, it is often impossible to get an answer as to the rationale, although the usual good practice of good financial management apply.

Nasqueron

AFF8879 wrote: »

Even putting aside the fact credit score numbers might be meaningless (I personally don't buy into this argument as I feel it makes people more aware of their financial health and the sorts of things lenders look for, and keeps people focused, even if the number generated on the report is not used anywhere) - a single application should not cut your score in half, unless it is extremely low anyway (judging only on the information given, I don't see why it would be THAT low).

People who still have active bankruptcies can get the maximum 999 from Experian. Scores ARE worthless, the data on the record is all that is important.

The credit agency doesn't lend you money do they? However, they earn money from selling "improvement" services to help raise the score that they themselves generate