Applying for Loan after Payment Holiday

Shakin_Steve

lumy said:

Is that definitely right? I ask, because I can see the outstanding balance and payment amount for credit cards each month as you say but not for the mortgage - that simply states "Up to date" when you mouseover each month

On my Experian report it shows the month by month mortgage balance decreasing. If three of those months showed the balance staying the same or increasing with interest, then it would be obvious I'd taken a holiday.

KoshB5

They don’t need open banking; your credit file has many attributes to it. The free services tend to provide a summary view, if you want to see everything held use the CRA’s direct free credit report capability, which should show more detail. You can also requesting a SAR, which would give you everything they hold on you not just your credit file, as they provided many services e.g. fraud & ID verification, debt collections, affordability….

It has been a few years since I worked for one of the CRA’s, this list will give you a view (not complete!) of what is held, actual fields are dependent on (a) type of account and (b) what the provider chooses to submit for that account:

• account type, current balance, current credit limit, account start date, account closed date, account status, number of overdue payments, change to payment terms, default date, original default balance, arrangement start / end date, regular payment value, expected payment value, penalty interest amount, does a promotional rate apply, only minimum payment made....

An account will have history details (values held dependent on type of account), based on repayment frequency:

• year and month of entry, balance amount for entry, credit limit for that point in history, payment status, statement balance, payment amount, number of cash advances, total value of cash advances....

Data is also returned on hard (credit application) searches, financial links, aliases you may have, how they validated your address e.g. current / historical address, on electoral role. CIFAS (if requesting organisation is a member) entries and public data i.e. bankruptcies, insolvencies.

CRA’s also provide summary views of data. What gets seen is also determined by the rights of the organisation making the request e.g. if you submit data you have more rights to see more data / viewpoints (this is one of the reasons utility companies started submitting their data).

I hope the above helps.

lumy

Seems that I can withdraw consent for open banking and if so I can't see how they can tell I've had a mortgage holiday.

KoshB5

I would expect that your history will show that your outstanding balance has not reduced (and also what was paid i.e. 0) for any account during the payment holiday. 

lumy

KoshB5 - thanks for the information. I actually have a paid credit file at equifax. If the balance and payment amount is held monthly on all accounts, why is it only shown to me on some accounts? Surely, the reason that some accounts do not show this data is because they do not hold that data?

KoshB5

As I said in my initial post, data held is dependant on the type of account / what the organisation chooses to provide.

How a lender assesses you will be down to their business model and will factor in what they deem important to assess the risk of doing business with you. The payment holiday facility only guarantees that there will be no negative markers on your file for the account i.e. missed payment, default, arrangement to pay…

They will assess your file as a whole looking at many things e.g. overall debt level against available credit, payment history profile, is your level of debt for an account static, going up or going down…..

They will also do an affordability assessment and may also ask if you have had a payment holiday, which has to be answered honestly else it could lead to the likes of a Cifas marker, which can have severe implications for a person.

Unfortunately, as only the lenders know their lending criteria, you will only find out if you are successful by applying.

Covid-19 has changed the world, lenders are more risk averse in undertaking new business, anything that indicates a person is potentially in financial distress will likely count against them.

OneTrueScotsman

What kind of loan was the credit holiday for? Your CR will show your payments being up to date.

If the holiday was for a personal loan or mortgage, they'd know about the holiday b/c the balance didn't go down those three months.

If the holiday was for a credit card, those balances go up and down anyway. The only way I can see a potential lender knowing you took the holiday is by looking at the amount of the payments you made for those three months, and seeing it was 0. But frankly, for getting a standard loan I don't think this will make much difference assuming your payment history was good before. If you were applying for a mortgage, that would be another matter.

In any event, yes, pay off the loan in question if you can before applying for a new one. It can't hurt.

lumy

The payment holiday was for a mortgage. I contacted Barclays who (after double checking with another department)  assured me there was no way for a potential lender to see or calculate that there was a payment holiday with the information they supply to the CRA. So, I applied for the loan and the application was successful so I can only deduce that what they said was actually true. :-)

Thrugelmir

lumy said:

The payment holiday was for a mortgage. I contacted Barclays who (after double checking with another department)  assured me there was no way for a potential lender to see or calculate that there was a payment holiday with the information they supply to the CRA. So, I applied for the loan and the application was successful so I can only deduce that what they said was actually true. :-)

The balance owing , if up todate on the file, is a clear indicator.  Lenders run algorithmns across datasets supplied by the CRA's. Within seconds they'll know if you meet their basic criteria or not. 

lumy

It really depends if there is more information than has been presented by equifax. Otherwise, it is absolutely not possible to make this calculation!

The only financial information I am presented with is original number of installments x installment amount and a current balance.

The mortgage was initially a fixed low payment for the first 2 years (no indication of this).. the reported installment amounts  don't match exactly with either the low start payments or the current payments and all the monthly statuses are satisfactory.

I can guarantee that my file is not the exception and that many mortgage files from Barclays (and probably other banks) aren't absolutely precise with the repayments. Therefore a loan company can only take the monthly statuses as proof whether timely payments have been made.

I would also be happy to bet that if a loan company worked out that payment holidays had been taken, in these extreme times, they would not approve the loan.