HELP! How else can I improve my credit score?

tessieboo123

My partner and I were looking to buy a house and discovered that we both had very poor credit scores. We were told by our mortgage adviser that despite the fact we have saved a good deposit and could technically afford the mortgage we were looking at, we could not secure a mortgage.

I've looked at both our credit files and corrected what I can as far as disassociating from old financial links, getting us both on the electoral roll, and getting us credit builder cards which I've been paying off in full for 3-4 months now.

There was also an incorrect defaulted account which I'm in the process of trying to get taken off, and one default that was correct and is now 3 years old.

Is there any more I can do to improve things? It's so frustrating when we have the money there for a house deposit and 'computer says no'!

I'm also confused as to whether I should pay the full balance on the credit builder cards each month? it means that the credit reports constantly say £0 balance, will they still know I've used and paid them off??

Any help or advice gratefully received

Tess

[Deleted User]

It's not the score you need to improve but your history. Which means a longer period of of good financial behaviour.

Clearing your card in full each month is key. But you'll need more than 3 months.

What mortgage advisor are you using?

tessieboo123

We were using Jim Marlow in Croyden as he came recommended from friends of ours, he seemed pretty good.

How long do you think before the cards start making a difference?
Is there anything more I should be doing?

[Deleted User]

If the default is truly incorrect, you need to get that removed.

Have you settled the other default?

PixelPound

What percentage deposit do you have? It's harder to get a mortgage with just 5% deposit if you have a poor credit history. If you spend some time continuing to show good use of credit you can also continue to build savings so that when you are ready for the mortgage you will have a bigger deposit (the larger the deposit the less of a risk it is for the lender, as they are more likely to get more of their money back should repossession happen)

Nebulous2

tessieboo123 wrote: »

I'm also confused as to whether I should pay the full balance on the credit builder cards each month? it means that the credit reports constantly say £0 balance, will they still know I've used and paid them off??

Any help or advice gratefully received Tess

When are you paying them off?

You need to wait until a statement has been generated and then pay in full before the due date. Paying the balance off before a statement has arrived makes it look as though you are not using them.

tessieboo123

Yes the correct default is settled, and the incorrect one is with the ombudsman.

tessieboo123

We have a deposit of roughly​ 25% and have also opened a help to buy ISA which we are adding to each month.

Candyapple

You may want to look for another mortgage broker then as yours sounds like he has given up!

If you read over on the Mortgages board, you can read numerous threads where people have 1 or 2 defaults and have still gone on to obtain mortgages - albeit at maybe a slightly higher interest rate - but your broker needs to be a whole of market broker and one who would know where best to place your application with lenders who are more lenient towards those with less than perfect credit histories.

Perhaps start a new thread over there asking for advice from any mortgage advisors as to what they would do if you were their client (tip, lots of them post on there).

http://forums.moneysavingexpert.com/forumdisplay.php?f=15

tessieboo123

Thank you for the tip! I'll head over and have a look!! Fingers crossed there might be hope for us yet!!

Candyapple

tessieboo123 wrote: »

Thank you for the tip! I'll head over and have a look!! Fingers crossed there might be hope for us yet!!

Please come back and update the thread with the outcome, it's always nice to hear how a story ends and may be useful for anyone else in the same situation

Also, be sure to leave an accurate review for your broker because if he's given up at this stage and ultimately you end up getting a mortgage elsewhere with a different broker, other people should know before wasting their money and potentially their dreams of owning a home.