Mortgage application failed at credit check - advice please

AS123

Hi,

Wonder if anyone can help/advise on this situation.

My girlfriend and I have recently applied for a mortgage and failed at the initial credit check, much to our surprise. We are looking for a mortgage for a new build property using the HTB equity loan.

We prepared for our mortgage application by ensuring that all our statements were in order and regular reference to our experian report. There is no information on the credit report relating to any missed payments or defaults although my girlfriend tells me she had some late payments on a mobile phone bill and a late credit card payment. The phone bill was > 6 years ago and the credit card 4 years ago (although it does not show on the experian report).

My understanding of the credit check process is that the lenders can access the experian report and see the same information as we can. From the information on the report we can find no problems/ things that we think would cause us to fall short at the first hurdle.

We failed an initial credit check with our first lender of choice (Virgin Money) and our broker reported that there was no right of appeal. I do not wish to appeal the decision but wondered will a lender (upon request) share with us the reason we failed a credit check if we make a formal request. The difficulty we have is that we cannot go about fixing the issue if we are not able to identify the issue. Having failed the credit check (which came completely out of the blue) the broker than asked if we wished to apply to the next best lender, we said yes to this (in hindsight a little hasty). We were then rejected a second time, again much to our bemusement. It is at this point that our broker requested to see our experian reports. We provided him with these and the only issue he was able to advise us of was that my girlfriend does not have 6 years history of addresses on there that she has added, although it does have the addresses as linked addresses.

My girlfriend contacted her mother at this point quite upset and distressed and her mum revealed that herself and girlfriend's father had a terrible credit history (unable to obtain credit for almost anything) and that the house was 'blacklisted'. On the experian website it states that credit report is linked to an individual and not an address. It then also states that those that view your report can see credit problems relating to the property. I think it would be incredibly naive to think that they would not make a link between girlfriend's current address (living with parents) and awful credit history/rating of parents living at the same address with the same surname. Is there a possibility that this could be the cause of the failed application? If so what options are available to fix the solution? Can this be turned round quickly?

We face the very real prospect of losing the property as we need to exchange within 4 weeks - what steps would you recommend taking from here? I'm almost resigned to not being able to get the property at this stage - what steps do we need to take long term if it is in fact the parents credit history affecting our chances by association of shared address and surname? Will changing girlfriend's address help things down the line? (Unfortunately we will still lose the property in that situation).

If anyone has any advice I would be more than happy to hear it and if anyone thinks there may be hope then happy to hear that also.

Thanks in advance

AS

ACG

What has your broker said?
It is not the house that is the issue, although financial association could be a problem.

Put on the full address history with experian, equifax and noddle. You can see what is showing on all 3 reports. If nothing then it is a little tricky.

Being declined by one lender is not an issue, but if you are being declined it is important to try and find out why before doing more credit checks.

AS123

Thanks for your reply.

All happened yesterday afternoon, broker suggested it was possibly the lack of full address history on experian but he is unaware about the parents poor history. Will do as you advise and see what comes up.

If reports look clear then it is likely association I presume? Would they associate a father and daughter at same address? I assume so.

worried_jim

AS123 wrote: »

If reports look clear then it is likely association I presume? Would they associate a father and daughter at same address? I assume so.

House aren't "blacklisted", there is no such thing. Could be associated with parent through something like a joint account, or could be an error especially if they have the same initials or similar names e.g. Paul smith and Paula smith.

On the credit report look for any details under financial associations.

No point asking Virgin or any bank a step they will never tell, this is where the blacklist address comes from, customers demand a reason for being declined so to get rid of the question a quick "could be the address" traditionally did the trick.

Thrugelmir

AS123 wrote: »

My understanding of the credit check process is that the lenders can access the experian report and see the same information as we can.

No this isn't the case. Lenders have access to datasets which provide a lot more detailed information. The datasets are analysed using algorithms and scored against the lenders internal criteria.

Electoral roll registration is a key requisite. Without this it's difficult to be certain that the file for an individual is both complete and accurate. .

surreysaver

If your girlfriend's parents have such a bad credit history, is there any possibility that they could have taken out credit in their daughter's name?

AS123

Thank you all for your replies and advice.


Have done as you said ACG and now acquired full credit reports from the three credit reference agencies you mentioned. It appears we have now found our likely cause. A defaulted credit card from 4 years ago on girlfriends account. She had mentioned a card that she had been late to pay but when she initially checked her experian report via MSE credit club it wasn't on there and she thought somehow that she had got away with it. It appears that when someone in the mortgage process has used a credit reference agency for identification checks it has pulled it all together and now it appears on her experian file - unfortunately for ourselves post application and post credit check with lender

Any ideas on were this is likely to head from here? In terms of timeframes do we need to wait until it completely clears (is that 6 years post event) before we can apply for a mortgage and likely be successful?

Thanks,

AS

csgohan4

you need a broker who deals in adverse credit to move forward. Is your broker estate agent recommended or a free one recommended by MSE themselves?

AS123

Broker is a free one via the company that built the home - how easy is it for us to break that tie? And where do you find someone that specialises in adverse credit - presumably that'd be advertised by themselves?

Thanks for your reply

ACG

Has the default been satisfied? How much was/is it for?

AS123

I believe it was for a couple of hundred pounds and the account is settled.