Mortgage after using Drafty

Bert1977

Hi everyone, I had a few financial difficulties approximately 5 years ago, basically i was a sole trader, the business failed and I was unable to pay a number of debts.  I ended up with about 7 default accounts and a CCJ.  I've now paid off the CCJ and almost all of the default accounts, but getting credit in order to build my file again has been difficult.  I got an Aqua credit card and have managed it impeccably, same with a co-op credit union account and a couple of other things (loqbox etc).  In a search for other products to help build my score I stumbled across Drafty, I applied and got a credit line and used it for the odd thing each month and paid it off every month without fail.  A few months later I applied for a small overdraft with a high street bank and they rejected the application due to me having a payday loan company on my file (nothing to do with defaults).....naively, I didn't actually realise Drafty could be classed as a payday loan.  I thought it was just a credit line and not in the same category.  My question is, when all the defaults drop off my file next year, is this Drafty account going to stop me getting a mortgage?  I haven't had a single late or missed payment on my account in 5 years, am using a low % of my available credit, and have used a low amount of the available credit line of the Drafty account, but having now done a bit of research (should have done this before signing up! doh!), some people are of the opinion that the very mention of Drafty on my file will blow any mortgage app out of the water.  Can anyone advise please?  ideally either someone who has applied for a mortgage that has used Drafty in the past, or a mortgage advisor etc.?  Please don't just guess, or state your opinions based on what you've ready 3rd or 4th hand, I'm just after actual real hard facts or experience.  Thanks in advance......hoping I haven't done some real damage using these as I really didn't need to use it!

Thrugelmir

Using more sources of credit than is actually required. Isn't going to rebuild your credit history any quicker. Focus on clearing the debts and building your savings. This will open more doors for you. As it's ultimately time that heals. 

[Deleted User]

generally most high street lenders will decline payday loans within last 12 months. Some are harsher than this and will go back much further. A couple of exceptions dont care as long as the internal credit scoring is strong enough. 

So, as unhelpful as it is, some wont like it, some wont care, and loads will be in the middle.    Definitely use a broker to help you navigate the market

[Deleted User]

When did you last use (draw down) Drafty?

Their older accounts definitely report as a credit card.... so technically it won't appear as a PDL on lender searches. Not sure if recent ones appear as a PDL or not, but I'm pretty sure they don't - my one from years ago is still open as a 'credit card' and also I've also declined clients for not declaring Drafty properly (e.g. using it 2 months ago but not telling us, and it wasn't a PDL on the credit file, or it wouldn't have got through to me).

If the lender asks if you've used a PDL in last X months/years you do have to be honest (otherwise it's mortgage fraud). Likewise if they see Drafty on your bank statement, that'll be a decline (unless it's an adverse lender).

If they don't ask and there's no declaration that you haven't used a PDL recently, then continue as normal (assuming it's just Drafty and not extra additional companies too).

Was it your main bank that rejected your for an O/D because of Drafty? That's understandable (as they see all your merchants/transactions etc. so are well aware Drafty is a PDL, despite the Credit File saying otherwise).

In terms of credit file, it wouldn't be Drafty that caused your OD decline. Check your TransUnion, you'll see it as a Card (and lenders don't see names that you see, only the type (e.g. CC/PDL/Overdraft)).