How long to remove something from credit rating?

rthomson1984

My mortgage fixed period ends in a few months so I started to look at what options are available and one turned me down on basis of credit.

I had a look and my rating is excellent with experian (only problem is less than 3 years at current address), but my partner has a very poor score. She is currently a stay at home mum so has little credit in her name but does have a default on o2 for £10 that seems to have a dramatic effect on her score, as it is the only negative (asides the same only 2 years in house)

To put this default in context - we both left o2 as after a change in bank account they kept blocking her phone every month when the 'bill' was unpaid, and I set up a new direct debit only for it not to work and so on for a few months. Eventually after ringing up for a few months in a row to pay on card I threatened to leave and they credited the account with something, I think about £20 as a goodwill gesture for the inconvenience, only for the direct debit to not work again and after another month or so I just moved to ee as I couldn't handle the incompetence. They have never been in touch over the £10 default and I don't usually check credit score which is how I am aware that 18 months later I can see it going 1-6 months in arrears then default.

Obviously I think I have pretty decent grounds to get it fixed but I really want to crack on with the mortgage and so wonder how long the process might take, and if there is anything I can do in the interim with regards to this. The frustrating thing is I already left o2 as a result of their inability to take a regular payment and it seems the default is a completely trivial amount.

Any advice much appreciated.

[Deleted User]

If the default is correct, as it seems, then you just need to get it paid. Time will do the rest.

Any credit score you may see is irrelevant to your chances of future borrowing as lenders only want to see how you manage credit. Just get your files in order, minimise borrowing and don't miss payments.

DCFC79

Remember though that the score is only seen by or your partner, lenders etc see your history.

Depends how quick 02 are to resolve it, if they are quick then maybe a month or 2.

rthomson1984

Sorry let me clarify - this is affecting my ability to get a mortgage, so "just waiting" isn't really an option. I appreciate that lenders are not looking at the score instead the history, but we have no issues asides from this 1 thing, which I believe is incorrect (and/or I'd happily pay the £10 to just make it go away).

I want to understand if it is realistic to remove it before I am getting hammered by the svr on my mortgage.

There is no way anything else is affecting my/our rating - I am an additional rate tax payer with an outstanding balance on my mortgage that is about 2 years salary and my expenses are super low. I have no other debts, pay cc every month in full etc. 

[Deleted User]

There seems no reason for it to be removed.  But settling it will improve how lenders see you.

If your expenses are super low, then take the opportunity to make some super over payments on the mortgage to reduce the balance.

rthomson1984

I'd rather invest money than pay down a mortgage accruing interest at less than 2%.

I'd argue there are good reasons for it to be removed - mainly due to the fact that I had no idea it was outstanding and had left the company due to their inability to collect money from me, including actually paying me a credit onto my account for the inconvenience of being unable to do so.

MattMattMattUK

rthomson1984 said:

Sorry let me clarify - this is affecting my ability to get a mortgage, so "just waiting" isn't really an option. I appreciate that lenders are not looking at the score instead the history, but we have no issues asides from this 1 thing, which I believe is incorrect (and/or I'd happily pay the £10 to just make it go away).

One default for £10 is not going to stop you getting a mortgage, although if still showing as in default it could make it a lot harder, once settled it will have a lot less impact. As it is only £10 it was probably worth making it go away several month ago. If you pay it, then it would change from defaulted to up to date any time between a week and several months, the time limit is a bit slower than normal at the moment, but you might get lucky, that process is not something which you can expediate, you just have to wait.

rthomson1984 said:

I want to understand if it is realistic to remove it before I am getting hammered by the svr on my mortgage.

How are you going about getting a new mortgage, did your provider offer you, or have you approached them for a follow on rate? Are you applying for a new mortgage somewhere and if so are you using a broker?

rthomson1984 said:

There is no way anything else is affecting my/our rating

Are you sure? One small default does not usually put up a complete block, although it might stop the automated processes for mortgage renewals. 

rthomson1984 said:

I am an additional rate tax payer with an outstanding balance on my mortgage that is about 2 years salary and my expenses are super low. I have no other debts, pay cc every month in full etc. 

Your income has no bearing on your (or your wife's) credit record. I suspect, if the issue was with your credit record you might have been rejected on the soft search, the default is making you currently unsuitable because it is still outstanding, an automated process will not look at affordability if you fail at the first test, not having any accounts in default. 

If you are not already doing so speak to a broker. Pay the result regardless of if you agree with it or not, if you want to you can then argue the toss afterwards. 

rthomson1984

Appreciate this advice - I'll speak to o2 and pay them.
My initial rejection was from my existing provider, based on me wanting to try to maximise the amount I can borrow upon remortgaging (they are apparently the cheapest according to mse anyway), rather than just rolling into a new mortgage based on existing outstanding balance.

MattMattMattUK

rthomson1984 said:

Appreciate this advice - I'll speak to o2 and pay them.

You can still choose to argue with them after, but it would be prudent at the moment to get it out of default so that is the best course of action.

rthomson1984 said:

My initial rejection was from my existing provider, based on me wanting to try to maximise the amount I can borrow upon remortgaging (they are apparently the cheapest according to mse anyway), rather than just rolling into a new mortgage based on existing outstanding balance.

Do you mean you wish to borrow an additional amount above what you already owe? Lenders are somewhat wary of that at the moment as it is increasing their risk and they are not short of potential mortgage applications at the moment. Also it will depend on what reason you gave for the additional borrowing, if you put down that you intended to build an extension or renovate the house then that would be much more likely to go through than if you put down you wanted to borrow to buy a new car or invest the money. 

rthomson1984

I *am* building an extension and that's the reason I gave for additional borrowing, although I have enough cash/liquid assets to be able to do the work regardless - just a preference to borrow new money.

rthomson1984

Update: We spoke to O2, who cancelled the debt (did not have to pay), and will apparently inform credit ratings agencies.