Defaults impacting credit rating

2catsandcounting

I know that defaults stay on your credit file for 6 years, but in that time do they have less of an impact?

I have one default dating from October last year, put now all my debts are completely paid off and me and my partner are saving to buy a house.

Will this default impact on my ability to get a mortgage until it drops off, or will it become less impacting the older it is, as long as i'm behaving credit wise. We're hoping to buy in 2019 after we get married, but really hoping we don't have to wait until 2024 for it to drop off completely!

Dribiddi

I'm no expert so please defer to others but my understanding is that time is a healer.
Banks don't look at a credit score/report to assess your suitability for credit they look at your credit info. So if say you have 3 years of impeccable credit management and little/no debt since the date the default was registered and a healthy deposit and affordability score you might find a broker that can get you and partner a good deal. It will be a detractor of some sort however for the duration of those 6 years I'm afraid. If possible might be worth accessing if partner can get mortgage in their name only if default is too big a hurdle

Nebulous2

It might be worth posting on the mortgages board. There are brokers who post there regularly. Time, good history of regular payments, record of regular saving, good deposit and being on the electoral roll will all help.

The older the default becomes the less impact it will have. You might be limited in lenders and may not get the best rates, but once it is a few years old then your options will improve.

DCFC79

Its completely down to the lenders if they will accept you with the default, if its just 1 you might be ok when its time to buy.

Remember only you and you only can see your score, banks see your credit history.

Westminster

Once a defaulted accounts reaches the 6th anniversary of its default date, the account is totally removed from your credit file.

So in that respect, a defaulted account can be less damaging to your credit file than a non-defaulted one.

The reason being, that a non-defaulted account remains visible (along with all its payment history) for 6 years from the date you fully settle / close the account.

You are correct that the older the default (with no further adverse activity) then the better for you when looking for a mortgage. Find yourself a broker who regularly deals with (or specialises in) adverse credit mortgages. You can google something to that effect to get a few brokers you can phone up and have a chat with.

I think that once they are 2-3 years old then you have many more mortgage options.

Discount any that do not ask for copies of your 3 credit files for both you and your partner.

MEM62

Ultimately it depends on the lender and their policies. However, generally speaking, the older a default is the less impact on your credit standing it should have.

2catsandcounting

That's great thanks for your help!

I was just worried that with a default on there it would be an automatic no from the off, still a couple of years away anyways!