AiP - Scared About Credit Scores!

annetheman

Hi everyone,

I wondered if anyone is able to let me know if I'm being paranoid about my credit scores.
I only have an AiP at the moment, I have not yet made an offer for the house I'm very, very interested in (going to view again tomorrow) and yet to really move forward with anything but I thought, why not get ready now for the potential credit checks in a few months by my lender!

I'm going through L&C as a broker, who have said everything is fine - the mortgage advisor was brilliant, explaining everything clearly. I had previously checked my credit score on only one site (Experian) and was pretty fine with it but then decided to check my credit scores on the other main ones - Experian, Credit Karma and ClearScore and I am freaking out now!

Experian - 900/999 "good"
Credit Karma - 556/710 "needs work"
ClearScore - 439/700 "looking bright"
Those are awful! I am so scared now. I have applied for a 95% LTV on £152,000 on a £55,000 salary but I only started this job last month. Previous bank statements will show I was on £35,000 since before Jan and constantly in my overdraft (which is 3K) with about £2000 on credit card.
I've only *just* started to "look good" in my finances, so these scores are terrifying. Please help - should I not apply now? Even though I really, really, want the house?

spadoosh

Credit scores are an arbitrary measurement, they dont really mean much. The credit agencies just make them up based on certain things in your credit report.
My credit score is excellent across all the agencies, a lender would be utterly stupid to consider lending me money though as it wouldnt be affordable for me. 

Is there anything in your credit report which might be a flag, regular late payments? CCJ/Defaults? Cifas markers?

If not, youve probably got very little to worry about. Youll hit the affordability criteria, so chances are someone will lend to you, although depending on the credit history you might be paying a bit of a premium in interest rates. 

ACG

You do not have a credit score.
Lenders take the information (ie balances, limited and payment history) from your credit report, they then combine that with the information on your application (ie income, number of dependants etc) and then score your application based on their own internal scoring system. Every lender has their own way to calculate this and so that is why we say one lender declining you does not mean they all will.
Ignore the score, whilst L&C brokers are probably not the most experienced out there, you should trust your broker. I am sure if they thought you were beyond help they would say so (hopefully not as bluntly as that). 

annetheman

spadoosh said:

Credit scores are an arbitrary measurement, they dont really mean much. The credit agencies just make them up based on certain things in your credit report.
My credit score is excellent across all the agencies, a lender would be utterly stupid to consider lending me money though as it wouldnt be affordable for me. 

Is there anything in your credit report which might be a flag, regular late payments? CCJ/Defaults? Cifas markers?

If not, youve probably got very little to worry about. Youll hit the affordability criteria, so chances are someone will lend to you, although depending on the credit history you might be paying a bit of a premium in interest rates. 

Yes, I had a CCJ which was successfully set aside - https://forums.moneysavingexpert.com/discussion/5564575/ccj-has-been-set-aside-when-will-my-credit-rating-go-up#latest - I fought it in court and was successful then had the court rule in my favour (dodgy landlord).
Defaults: I was late paying my Natwest credit card but they texted me the same day it was due "just to let you know, your payment has not reached your account etc" and I paid immediately - this was in October 2019.
I'm not sure what a Cifa marker is so I'll say no?

I think paying a premium in interest is kind of affordable for me at the moment, obviously my pay has gone up a lot, my rent is £675 and the lender's mortgage quote was £620... But because of the above, I should worry? Gahhhh

Thanks for your help!

Thrugelmir

If you are constantly in your overdraft and owe money on your credit card. What's the source of your deposit? 

annetheman

Thrugelmir said:

If you are constantly in your overdraft and owe money on your credit card. What's the source of your deposit? 

Gift from the Bank of Dad , he hasn't transferred it yet. Should I ask him to to get out of overdraft?

spadoosh

annetheman said:

spadoosh said:

Credit scores are an arbitrary measurement, they dont really mean much. The credit agencies just make them up based on certain things in your credit report.
My credit score is excellent across all the agencies, a lender would be utterly stupid to consider lending me money though as it wouldnt be affordable for me. 

Is there anything in your credit report which might be a flag, regular late payments? CCJ/Defaults? Cifas markers?

If not, youve probably got very little to worry about. Youll hit the affordability criteria, so chances are someone will lend to you, although depending on the credit history you might be paying a bit of a premium in interest rates. 

Yes, I had a CCJ which was successfully set aside - https://forums.moneysavingexpert.com/discussion/5564575/ccj-has-been-set-aside-when-will-my-credit-rating-go-up#latest - I fought it in court and was successful then had the court rule in my favour (dodgy landlord).
Defaults: I was late paying my Natwest credit card but they texted me the same day it was due "just to let you know, your payment has not reached your account etc" and I paid immediately - this was in October 2019.
I'm not sure what a Cifa marker is so I'll say no?

I think paying a premium in interest is kind of affordable for me at the moment, obviously my pay has gone up a lot, my rent is £675 and the lender's mortgage quote was £620... But because of the above, I should worry? Gahhhh

Thanks for your help!

If the CCJ is set aside it shouldnt affect your application. 

The credit card payment youre talking about isnt a default. It might be classed as a late payment, you should be able to see if it has on your credit report. A late payment isnt that likely to affect your application anyway, lots of them will, but the odd one here and there over a 6 year period probably isnt going to be that bad. 

Cifas markers are typically fraud markers, basically a warning to lenders that fraud incidents surrounding you are more likely. Could either be a victim of fraud or a suspicion of you being fraudulent. 

If a mortgage broker didnt think they had a chance of getting you a mortgage (ie them getting paid), they wouldnt be too keen to spend time with you trying to get it. If theyre giving you good feedback, it should be a good indicator of your chances. as mentioned affordability looks fine, and there doesnt appear to be anything major on your credit report. 

Time to just let it play out. Its new and daunting to you but its worth bearing in mind several thousand mortgages are approved in the UK everyday. Just respond promptly when asked for any information and ensure you remain honest with your broker.

annetheman

spadoosh said:

annetheman said:

spadoosh said:

Credit scores are an arbitrary measurement, they dont really mean much. The credit agencies just make them up based on certain things in your credit report.
My credit score is excellent across all the agencies, a lender would be utterly stupid to consider lending me money though as it wouldnt be affordable for me. 

Is there anything in your credit report which might be a flag, regular late payments? CCJ/Defaults? Cifas markers?

If not, youve probably got very little to worry about. Youll hit the affordability criteria, so chances are someone will lend to you, although depending on the credit history you might be paying a bit of a premium in interest rates. 

Yes, I had a CCJ which was successfully set aside - https://forums.moneysavingexpert.com/discussion/5564575/ccj-has-been-set-aside-when-will-my-credit-rating-go-up#latest - I fought it in court and was successful then had the court rule in my favour (dodgy landlord).
Defaults: I was late paying my Natwest credit card but they texted me the same day it was due "just to let you know, your payment has not reached your account etc" and I paid immediately - this was in October 2019.
I'm not sure what a Cifa marker is so I'll say no?

I think paying a premium in interest is kind of affordable for me at the moment, obviously my pay has gone up a lot, my rent is £675 and the lender's mortgage quote was £620... But because of the above, I should worry? Gahhhh

Thanks for your help!

If the CCJ is set aside it shouldnt affect your application. 

The credit card payment youre talking about isnt a default. It might be classed as a late payment, you should be able to see if it has on your credit report. A late payment isnt that likely to affect your application anyway, lots of them will, but the odd one here and there over a 6 year period probably isnt going to be that bad. 

Cifas markers are typically fraud markers, basically a warning to lenders that fraud incidents surrounding you are more likely. Could either be a victim of fraud or a suspicion of you being fraudulent. 

If a mortgage broker didnt think they had a chance of getting you a mortgage (ie them getting paid), they wouldnt be too keen to spend time with you trying to get it. If theyre giving you good feedback, it should be a good indicator of your chances. as mentioned affordability looks fine, and there doesnt appear to be anything major on your credit report. 

Time to just let it play out. Its new and daunting to you but its worth bearing in mind several thousand mortgages are approved in the UK everyday. Just respond promptly when asked for any information and ensure you remain honest with your broker.

Thank you so much.

That's reassuring and a reminder that I'm panicking when I haven't even committed or started anything really. I really, really love this house so I hope I get it, and it's so exciting to think I will own my own place and no longer be paying rent but investing capital for my future. 

I didn't expect to want to buy this soon, maybe if I didn't find this house I'd have more time on my better pay to sort out my debts, so I guess I'll just see how it goes...

I thought the broker was happy with everything because they wanted me to pay their conveyancer etc and get their commission, even if I fail... I guess I don't know how any of it works! You can read all the info in the world, but it's not the same as going through it.

Thanks again

amnblog

Have you an application in principle (confirmed from a specific Lender), in which case, they are happy with your credit profile.
or
An AIP from L&C which I understand from previous posts does not have Lender's approval.

annetheman

amnblog said:

Have you an application in principle (confirmed from a specific Lender), in which case, they are happy with your credit profile.
or
An AIP from L&C which I understand from previous posts does not have Lender's approval.

What I had was an initial AiP from L&C via an online application, which was way high, then I spoke to the mortgage advisor on the phone and he asked me pretty much the same questions I had answered online and looked at 3 different lenders:

* the first I wasn't qualified for because I changed jobs in January (even though I finished one job Friday, into the next the following Monday)!
* the second wouldn't allow 5 years' fixed term for 95% LTV
* the third he said I would be approved for for slightly above the amount I hope to put as an offer.

So I haven't spoken directly to any lender, L&C have checked them for me - does that make sense?