Need help with partner's bad credit

banking

My fiance and I are saving to buy a house. After checking our credit scores, we found that her mother has opened 4 credit accounts with catalogues in her name and maxed them out, running up debts of £5000+ and one of them hasn't been paid for over 6 months!

After speaking to my fiance, she said that her mother persuaded her to open one account in her name 4 years ago on the grounds that she pays it off every month and doesn't miss a payment, not realising the future consequences.

After confronting her mum, she has agreed to clear the debts but it will be over 1-2 years. I feel like 6 months of missed payments is going to stay on her file for years and ruin our chances of getting a mortgage, we both have low incomes so we won't be able to get a mortgage in just my name, we also have a joint account together so I'm worried it could affect my credit too.

A few questions I have are;

1. How can her mother open more accounts without her permission, from a different address and using a different date of birth?
2. How will this affect our future? We're ready to get a house and start a family.
3. I'm assuming this is fraud, but is there a way to resolve this, keeping our future intact without ruining their relationship?

Any help would be appreciated.

[Deleted User]

1) She managed to provide enough information to get accepted by at least some of the applications she made.
2) It will make it very difficult for her to be accepted for mainstream credit with debts and defaults. If you are financially associated, lenders may also take her history into account when you apply for credit.
3) No. If she wants the accounts off her credit file, she needs to report it as fraud.

banking

Thanks for your response. That's what I was worried about. I highly doubt she will report her own mother for fraud but if she did, what would the likely outcome be?

[Deleted User]

It depends on how the police deal with it

GDB2222

"her mother persuaded her to open one account in her name 4 years ago on the grounds that she pays it off every month and doesn't miss a payment"

That wasn't in mum's name, and it wasn't fraud. It was in your fiancee's name, and she's liable for the debt.

The other three accounts were indeed fraudulent. Your fiancee can write to the catalogue companies, explain there's been identity theft without naming mum, and leave them to investigate. They may not bother, as I guess each of the three catalogues is 'only' owed £1k or so. Or your fiancee can leave those. Are they even linked to her credit file, if a false address and date of birth was given?

Candyapple

Have you both checked all 3 credit reference agencies? The free versions to check your credit files are below:
Experian: https://www.moneysavingexpert.com/creditclub
Equifax: https://www.clearscore.com
Call Credit: https://www.noddle.co.uk

banking wrote: »

I feel like 6 months of missed payments is going to stay on her file for years and ruin our chances of getting a mortgage, we both have low incomes so we won't be able to get a mortgage in just my name, we also have a joint account together so I'm worried it could affect my credit too.

You are right to be worried. 6 months of late payments especially say within the last 12 months is going to severely hamper your chances of getting a mortgage. It will also stay on your partner's file for the next 6 years.

Yes if you are financially connected (as you are as you have a joint account) that means if your partner's credit history is rubbish, it in turn will definitely affect yours should you try and apply for say a card or loan in your own name as lenders will search your partner's files as well as yours (because you are linked).

How much is your / your partner's annual salary?

How much deposit do you have saved?

How much is the house prices you are looking at buying?

banking

Thanks for the responses.

The original catalogue has a minimum payment being made every month with no missed payments in the last 2 years. It's the other 3 accounts with a different company that are the bigger issue. They all have a maxed out credit limit of £1000-1500.

We checked our credit scores through the credit club (experian), mine is 970, hers is 300 ish.

We have a combined pre-tax income of around £25000, We each have a help to buy ISA and currently have around £12k saved for a deposit, we were planning to buy a home next year in the region of £150k-200k.

Thanks

[Deleted User]

banking wrote: »

We checked our credit scores through the credit club (experian), mine is 970, hers is 300 ish.

Ignore the pretend scores.

You need to look at what data appears on her files.

beckysheffield

GDB2222 wrote: »

"her mother persuaded her to open one account in her name 4 years ago on the grounds that she pays it off every month and doesn't miss a payment"

That wasn't in mum's name, and it wasn't fraud. It was in your fiancee's name, and she's liable for the debt.

The other three accounts were indeed fraudulent. Your fiancee can write to the catalogue companies, explain there's been identity theft without naming mum, and leave them to investigate. They may not bother, as I guess each of the three catalogues is 'only' owed £1k or so. Or your fiancee can leave those. Are they even linked to her credit file, if a false address and date of birth was given?

Worth pointing out there’s a reason why mother couldn’t open her own catalogue account.

Candyapple

banking wrote: »

We have a combined pre-tax income of around £25000, We each have a help to buy ISA and currently have around £12k saved for a deposit, we were planning to buy a home next year in the region of £150k-200k.

All your other issues aside, your chances of getting a mortgage for the house prices you are looking at are slim to none. Even if you found a lender willing to lend x5 of your combined salaries that would mean they'd lend you £125k and even with your £12k savings on top would mean the max price of houses you could look at would be circa £137k. Not to mention BOTH your credit histories would have to be immaculate and zero debt from either of you.

I think you may need to lower your expectations and look for houses in the £100-£120k bracket, or both of you need to look for much better paid jobs.

banking

We'll have another year of saving's by this time next year (maybe another 10k) and I'm hoping and praying that the house prices fall. If they don't, we could always settle for something around 120-130k. I'm more concerned about her credit. She's adamant that she will not report her for fraud (which I understand), I'm just looking for other options and trying not to let it affect our relationship.