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Previous bad debt - mortgage advice
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Mistakesweremade
Posts: 4 Newbie
My wife and I are trying to get a mortgage but while we have 50k income, no current credit outside of phones etc we are only able to find one company to provide a mortgage at 4.5%
I do have a history of bad credit, including an IVA that was settled early in full over 10 years ago.
The problem as far as I understand it is that I did a full and final settlement (at 50%) on a barclaycard 3 years ago, so this is still showing a debt of £766 on my Xperian credit report.
Our current plan is to take the mortgage on offer for two years, pay off the 766 on the barclaycard, then when we remortgage my credit report will show nothing owing.
Please can you give us some advice on our options as we are first time buyers and this is all new to us.
Thanks in advance.
I do have a history of bad credit, including an IVA that was settled early in full over 10 years ago.
The problem as far as I understand it is that I did a full and final settlement (at 50%) on a barclaycard 3 years ago, so this is still showing a debt of £766 on my Xperian credit report.
Our current plan is to take the mortgage on offer for two years, pay off the 766 on the barclaycard, then when we remortgage my credit report will show nothing owing.
Please can you give us some advice on our options as we are first time buyers and this is all new to us.
Thanks in advance.
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Comments
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Speak to a broker.
You’ll be lucky to get a mortgage at high street rates with bad credit history.0 -
Gary so not true.
IVA 10 years ago would make little difference.
I work with lending criteria. IVA not an issue. Settled default of that amount would be disregarded. Normal rates would apply.
A broker would the best answer.0 -
A 50% full and final settlement 3 years ago? Was this to Barclaycard or a DCA? When is the default date? How exactly is this account reported on your credit files?0
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OP once a full and final settlement is made it should change how its being reported on your files, as above check how its being reported.
Check Equifax and Transunion (free options to check these 2) since brokers could check all 3.0 -
Thank you for the reply, my query is more around settled cards and their impact on my score and prospective mortgages in the future.
If I settle the balance in full, then when we remortgage in two years will we likely see some better options?0 -
Ben8282 - it is showing as settled, but in the defaults section for £766 on experian.
I need to check the others as they may show different.
I'm going to settle it just to make sure I just wanted some feedback on how it works and how it may be in two years time.0 -
Mistakesweremade wrote: »Ben8282 - it is showing as settled, but in the defaults section for £766 on experian.
I need to check the others as they may show different.
I'm going to settle it just to make sure I just wanted some feedback on how it works and how it may be in two years time.
You siad you had settled it in the first post.
Remember your score is only seen by you, your history is seen by lenders.0 -
Apologies, by settled I mean that they accepted an amount less than the full owed in order to close the account.
I was unaware that this still showed the same on my credit report as if nothing had happened with it.0
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