Need to correct poor credit rating

Katykat

Bear with me if this post is long but I need to explain it correctly. My son bought a TV from Very on 11th June & set up a direct debit for 3x monthly payments. On 13th June Very rang him to say that he had defaulted a £20 payment that he should have made in lieu of it taking 1 month to set up the DD. My son says they didn’t tell him this and went further and paid the whole payment off in full, cancelled the DD and cancelled the account with Very. Fast forward to last week, he was rejected for a mortgage due to his poor rating ( prior to this, his rating was excellent). After discussion with the mortgage lender, he has now been approved in principle and has a certificate of agreement.  But he’s still worried as  Very told him it stays on his file for 6 years , 

What can he do? WHat steps can he take to correct this situation?

bradders1983

The three digit score he sees on Experian or Clearscore (or wherever) is meaningless, lenders use their own scoring criteria and there is no guarantee they saw him as "excellent" even before the Very situation occurred.

Katykat

bradders1983 said:

The three digit score he sees on Experian or Clearscore (or wherever) is meaningless, lenders use their own scoring criteria and there is no guarantee they saw him as "excellent" even before the Very situation occurred.

But wouldn’t Very have rejected him if his rating wasn’t good? At the time of purchase, all he owed was his current mortgage. 

bradders1983

They would have used their own score, and not the made up three digit "score" on Experian or Clearscore, that was my only point. And Very will accept almost anyone, they accepted me when I had a bankruptcy on my file.

D3xt3r5L4b

Katykat said:

Bear with me if this post is long but I need to explain it correctly. My son bought a TV from Very on 11th June & set up a direct debit for 3x monthly payments. On 13th June Very rang him to say that he had defaulted a £20 payment that he should have made in lieu of it taking 1 month to set up the DD. My son says they didn’t tell him this and went further and paid the whole payment off in full, cancelled the DD and cancelled the account with Very. Fast forward to last week, he was rejected for a mortgage due to his poor rating ( prior to this, his rating was excellent). After discussion with the mortgage lender, he has now been approved in principle and has a certificate of agreement.  But he’s still worried as  Very told him it stays on his file for 6 years , 

What can he do? WHat steps can he take to correct this situation?

Nothing he can do. Live and learn I suppose

sourcrates

It wasn`t a default, it was just a missed payment, not the end of the world.

He can`t take any steps to rectify the situation, except pay things on time in the future.

I wouldn`t worry too much.

Thenonameleague

Maybe not all lenders will view the history the same, maybe he should speak to a broker.

jonesMUFCforever

He bought a telly on 11th June paid it off on 13th June - surely nothing will appear on his credit file to indicate mismanagement of the account?

ceremony

Based on the timescales you give, it's unlikely that anything that happened relating to Very will have impacted on the chances of getting that mortgage. It's more likely it was something else. Lenders are tightening the criteria for mortgages right now. Has he taken any COVID-related payment holidays, received any form of support or taken any loans? Was he applying for a large mortgage?

He should request his credit reports from the 3 main CRAs. You can do that by using Clearscore, CreditKarma and MSE's Credit Club - they're all three and give access to different reports (Experian, Equifax and Transunion).

Ignore the scores. They're a load of rubbish. Just look at the information on the report. Are the addresses right? Is he on the electoral role. Is there anything on there that looks suspicious (I had an ex continuing to apply for credit in my name for a while and my report was quite a mess, for example!).

If there's anything wrong with the reports, get it put right.

It sounds like the mortgage has been sorted now. He can argue with Very if he wants, but an account won't be marked as defaulted for one missed payment, just show on the report as one month late. A missed payment will remain on his file for six years, yes, but the damage it will do in the eyes of most lenders is minimal and will reduce even more over time.

Thenonameleague

Thenonameleague said:

Maybe not all lenders will view the history the same, maybe he should speak to a broker.

If he does get rejected then maybe he should consider speaking to a broker.

As mentioned he should check his 3 credit files.

Katykat

very helpful ceremony.Yes, he did take a 3 month mortgage holiday when he was furloughed. I think that must be the problem. He has restarted it now, but it seems unfair that it has affected his credit rated.