Credit Report - Desperate

BA1985

Hi all,

After some advice, and the title pretty much sums it up.

We are currently selling our house, and are looking to buy another. Our finances have been woeful as of the last 3/4 years, so the main reason for selling was to downsize slightly, and release equity in the house (around 100k) which would be used to pay off existing debt, so we are totally debt free, and use as a deposit on the new house.

Due to our bad credit, we used a broker, who found us one lender who would consider us. We applied, and they gave us a mortgage in principal.
We then saw a house we wanted (New Build) & paid £500.00 deposit also started the Solicitor process for both buying and selling (£150.00).

We then proceeded to full application, and we have been declined.

The reason being, is that there had been a change on our credit reports since the offer in principal was made.

I have since found out, that this has been down to one call i had with Nationwide, our current mortgage lender.
I contacted them in June, to advise that i had some arrears i needed to pay for some existing council tax (well actually our council took £1200 straight out my salary by contacting my employer) - But thought i would be a little proactive, and say i am going to struggle to pay July's payment, and could i either have a payment holiday, or 1 month be added to the account balance. At this point Nationwide called me, and an advisor said I qualify for a payment holiday, and I could have this for 3 months (I would pay the interest only which was around £270 instead of our normal capital payment of £800. I thought this was great, as it would help whilst selling the house to save a bit more towards the costs of moving.

So I duly accepted the 3 month break, and heard nothing more of it. Until this decline. The lender has stated that on one of our credit reports (Noodle) – it states we have been in Arrears for the last 3 months with our mortgage, and were no longer willing to lend to us.

I checked my report on Noodle, and it states the last 3 months as green in colour but “AR”

We are truly gutted, at no point were we made aware by Nationwide that this would have a negative effect on our reports, and if they had said, no way would I have agreed to the payment holiday considering we were going through the buying/selling/mortgage process.

I guess I need to know, if anyone has had this before? Should I complain to Nationwide? Can I get them removed?

I believe we have lost the house we wanted, the developer has already put this back on the market, we have also lost the £500.00 deposit, and £150 for the solicitors.

Any advice would be much appreciated.

Thanks

[Deleted User]

Is it an incorrect marker though?

What do your other credit files say for Equifax and Experian?

BA1985

Im not sure if it is incorrect or not, i believed, as we agreed to pay a lower amount, when i did pay that lower amount, it was marked as a successful, received payment, just as it would be when paying the full amount previous. The difference in between the two payments i assumed, just went back on to the mortgage & the normal monthly payment would be potentially higher to take this into account. Nationwide, didn't explain any of this though or the negative effect on our credit.

Experian is showing as green marks for the last 3 months, no issues.

[Deleted User]

According to CallCredit, AR means "Arrangement to Pay in force".

Which is correct

sourcrates

They should of told you it would be marked as an arrangement to pay.

Anything less than the contracted payment will be marked as such.


I would advise a written compliant to the bank.

[Deleted User]

I'm sure it will be in the paperwork/terms when the mortgage was taken out

Willing2Learn

@BA1985

Nationwide should have advised you that when you "qualified for a payment holiday", for a 3 month duration, it would result in in your credit file having an AR against it. That would have allowed you to make an informed decision.

I would also make a written complaint to Nationwide, stating that you were misled and never given the full information at the time of the AR being arranged. Because of their omission in telling you the full facts, it could be considered that your credit file is now marked detrimentally. They should have told you...

jimbo26

Looks like some lenders do mark your file as AR. I would expect them to make this very clear as it has a big impact on your credit file. If they didn't you may be able to resolve this via a complaint.

https://www.checkmyfile.com/jargon/payment-holiday.htm

NYClaire

Recently an oversight meant I missed a car payment, when I contacted them to say it was a mistake but could I spilt the amount over the next 2 months I was informed it would be a arrangement and could affect the credit file. We are looking to move next year so didn’t want that to happen. This seems like it’s always mentioned so I would complain! They should have all calls recorded so would be able to be sorted quickly. Good luck!

T-G-C

I think the phrase "Approved in Principle" should be banned under regulations. It is a deceiving method for a lender to entice a borrower into continuing their application, under the impression that the product applied for is a done deal and only clerical work remains to be completed.

In reality, the lender has conducted minimal, if any, checks on the borrower and the chance of actual approval once those checks are made are no higher than before "Approved in Principle" was announced to the applicant. A lot of loan companies tend to do this, where they require proof of income or similar and then even when the figures match, there is no guarantee of approval and the decision can be reversed to declined with no explanation given other than not meeting their lending criteria, which "Approved in Principle" naturally insinuates you have, as long as the figures match on any documentation requested.

If they enforced a swap of "Approved in Principle" to "Application Decision Pending - Checks Awaiting Completion" or similar, this deception can be eliminated.

BA1985

Thank you for your responses,
I have lodged a formal complaint with Nationwide, on the basis that I wasn’t properly informed of the knock on effect to agreeing the holiday payment, and if I had been, I wouldn’t have accepted it due to going through mortgage checks.

It seems Noodle is the only company who have recorded this as AR. Equifax, Experian, Clear score haven’t.

If it help’s anyone else, I will keep this thread updated in respect to the outcome.

Thanks