Things I didn't know I had on my credit report - some perspective required?

annetheman

Until very recently, and having passed underwriting with Leeds until EWS1 delay of months eventually cancelled the application, I honestly thought that my credit report was okay with a score of 477 on ClearScore, which uses Equifax data only. 

When I checked "CheckMyFile" score across Equifax, Experian and TransUnion recently, I realised that I am not such a credit hotshot after all. Can you tell me what you think of this file, am I high risk for lenders? All the "issues" stem from a time in 2017 when an umbrella company I worked through never paid me on time. I was unaware that actually AR (arrangement to pays) and late payments are just as damaging as defaults or CCJs:

High Street Current Account - Arrangement to Pay on overdraft of £2,000
April 2017
May 2017
June 2017

High Street Personal Loan - Late Payment on loan of £3,600
April 2017

High Street Personal Loan - Arrangement to pay on loan of £3,600
May 2017

Context: since then, I am never in my overdraft, no personal/any other loans and 2x £7,000 limit CCs paid off in full every month. Nice healthy pot of savings and a regular PAYE paycheck.

Is this quite poor? Does this make me an "adverse only" type of credit applicant - I am applying for a mortgage with Kent Reliance now, by the way!

[Deleted User]

Arrangement are equivalent to defaults, though obviously not as bad a CCJ.

Go to the mortgages boards for advice on where best to apply. You can probably do better than sub prime, assuming everything is now settled.

annetheman

Deleted_User said:

Arrangement are equivalent to defaults, though obviously not as bad a CCJ.

Go to the mortgages boards for advice on where best to apply. You can probably do better than sub prime, assuming everything is now settled.

Thanks! I already am applying to Kent Reliance, overlords of subprime who just happen to have similar rates to other lenders right now due to how high they are for Shared Ownership post-lockdown 1.

But I wanted a general view of the bad things on my report, just how bad are they (not necessarily in the context of a mortgage, for anything).

E.g. I didn't know arrangements to pay were as bad as defaults! They'll be on my report for a while yet, but what is very surprising is that in the time since, I have taken out 2 credit cards, extended my overdraft then closed it, and passed underwriting for a mortgage, all without realising I had the arrangements - in my mind they were just ad-hoc new dates to pay back the credit, not a formal mark on report.... Ah, you live and learn though!

Thrugelmir

Any financial arrrangement where you do not repay the debt in acccordance with contractual terms is broadly speaking a default. Lenders will each have their own criteria as to what's acceptable to them. When considering new applications for credit. Likewise the product you are offered may reflect a pricing for risk. Your credit profile provides a lender with a picture of you and your attitude to the management of your personal finances. Think of it as being in a beauty competition. Lenders can pick and choose their customers depending on their target market. 

[Deleted User]

annetheman said:

Until very recently, and having passed underwriting with Leeds until EWS1 delay of months eventually cancelled the application, I honestly thought that my credit report was okay with a score of 477 on ClearScore, which uses Equifax data only. 

When I checked "CheckMyFile" score across Equifax, Experian and TransUnion recently, I realised that I am not such a credit hotshot after all. Can you tell me what you think of this file, am I high risk for lenders? All the "issues" stem from a time in 2017 when an umbrella company I worked through never paid me on time. I was unaware that actually AR (arrangement to pays) and late payments are just as damaging as defaults or CCJs:

High Street Current Account - Arrangement to Pay on overdraft of £2,000
April 2017
May 2017
June 2017

High Street Personal Loan - Late Payment on loan of £3,600
April 2017

High Street Personal Loan - Arrangement to pay on loan of £3,600
May 2017

Context: since then, I am never in my overdraft, no personal/any other loans and 2x £7,000 limit CCs paid off in full every month. Nice healthy pot of savings and a regular PAYE paycheck.

Is this quite poor? Does this make me an "adverse only" type of credit applicant - I am applying for a mortgage with Kent Reliance now, by the way!

What did your mortgage broker advise when you should him your credit files? 

annetheman

Lover_of_Lycra said:

annetheman said:

Until very recently, and having passed underwriting with Leeds until EWS1 delay of months eventually cancelled the application, I honestly thought that my credit report was okay with a score of 477 on ClearScore, which uses Equifax data only. 

When I checked "CheckMyFile" score across Equifax, Experian and TransUnion recently, I realised that I am not such a credit hotshot after all. Can you tell me what you think of this file, am I high risk for lenders? All the "issues" stem from a time in 2017 when an umbrella company I worked through never paid me on time. I was unaware that actually AR (arrangement to pays) and late payments are just as damaging as defaults or CCJs:

High Street Current Account - Arrangement to Pay on overdraft of £2,000
April 2017
May 2017
June 2017

High Street Personal Loan - Late Payment on loan of £3,600
April 2017

High Street Personal Loan - Arrangement to pay on loan of £3,600
May 2017

Context: since then, I am never in my overdraft, no personal/any other loans and 2x £7,000 limit CCs paid off in full every month. Nice healthy pot of savings and a regular PAYE paycheck.

Is this quite poor? Does this make me an "adverse only" type of credit applicant - I am applying for a mortgage with Kent Reliance now, by the way!

What did your mortgage broker advise when you should him your credit files? 

Nothing, and I have had no issue gaining any credit, hence my surprise! I didn't realise I had them until very recently, post mortgage apps. First broker didn't ask about my history or AFAIK run a report - he did miss a request for documents and the application lapsed though. Second one did ask for my report and chose Leeds then Kent Reliance as recommended but I thought that was because they're the only Shared Ownership lender options!

Neither mentioned "adverse", "arrangements", "specialist lender" or anything close.

Is this because they're more than 3 years old? So like a scar on my beautiful report, they fade with time?! But how scarred are we talking, am I Scar from Lion King or am I freckled singing mouse from Feivel Goes West?!

Thrugelmir said:

Any financial arrrangement where you do not repay the debt in acccordance with contractual terms is broadly speaking a default. Lenders will each have their own criteria as to what's acceptable to them. When considering new applications for credit. Likewise the product you are offered may reflect a pricing for risk. Your credit profile provides a lender with a picture of you and your attitude to the management of your personal finances. Think of it as being in a beauty competition. Lenders can pick and choose their customers depending on their target market. 

dunstonh

I honestly thought that my credit report was okay with a score of 477 on ClearScore, which uses Equifax data only. 

The score is just marketing.  It means nothing to lenders.

 I was unaware that actually AR (arrangement to pays) and late payments are just as damaging as defaults or CCJs:

Not quite as damaging as CCJs but certainly are a negative that lenders will consider.  they will usually reduce the amount lenders are willing to give you.   If the debts are not repaid, then that will be classed as further negative.  Whereas repaid in full debts will not be as damaging.

Is this quite poor? 

Yes.   Most people have clean records with no defaults, arrears, late payments etc.   So, in that respect, it is poor.

Late payments indicate a failure to manage your money and arrangements to repay is effectively a default.

Does this make me an "adverse only" type of credit applicant - I am applying for a mortgage with Kent Reliance now, by the way!

Probably not.  However, your choice of lenders will likely be restricted.

Using a mortgage broker would probably be in your interests as they will probably be able to keep you on a prime mortgage.

annetheman

dunstonh said:

I honestly thought that my credit report was okay with a score of 477 on ClearScore, which uses Equifax data only. 

The score is just marketing.  It means nothing to lenders.

 I was unaware that actually AR (arrangement to pays) and late payments are just as damaging as defaults or CCJs:

Not quite as damaging as CCJs but certainly are a negative that lenders will consider.  they will usually reduce the amount lenders are willing to give you.   If the debts are not repaid, then that will be classed as further negative.  Whereas repaid in full debts will not be as damaging.

Is this quite poor? 

Yes.   Most people have clean records with no defaults, arrears, late payments etc.   So, in that respect, it is poor.

Late payments indicate a failure to manage your money and arrangements to repay is effectively a default.

Does this make me an "adverse only" type of credit applicant - I am applying for a mortgage with Kent Reliance now, by the way!

Probably not.  However, your choice of lenders will likely be restricted.

Using a mortgage broker would probably be in your interests as they will probably be able to keep you on a prime mortgage.

Thank you! I understand the score is meaningless for lenders but I think it is what gave me a false sense of security for so long! 647/700 on CK etc makes you feel like you're doing the right thing in the absence of qualified advice from an IFA, so thanks for your input!

You can imagine the surprise when I realised, having had no issues with gaining credit, that I had what could be described as a poor credit report. I understand that some lenders may ask for context about what happened so for me, this is a lifeline. What do you think of my story of this blip in an otherwise boring/uneventful report:

During the period Feb-June 2017, I was working through an umbrella company that failed to pay my timesheet invoices on time, hence I did not receive my pay that would have been used to pay the accounts. I have all the correspondence escalating the issue until I eventually cut ties with them.

Once I binned them and worked through my own ltd company instead, I had full control of my invoices and finances and therefore had no issues with pay or repaying credit. Haven't had it since switching to PAYE, either.
--

Frustrating that someone else not doing what they should have been doing (edit to add: indeed what I was PAYING them to do!) makes me look like I can't manage my finances! Sometimes you have to take things into your own hands - glad I did eventually!

Fighter1986

Just to correct some misinformation - 

Arrangements to Pay aren't as damaging as arrears, defaults, or CCJs. An AP marker means that you've been honest and upfront about your circumstances, and the lender in question has agreed to temporary conditions on your account, after which you brought the account back up to date, and it remained open as usual.

Arrears / missed payments mean you haven't told a lender that your circumstances have changed for the worse and entered into an agreement with them. You've simply not paid the agreed amount on time. Once arrears are brought back up to date in a timely manner, the account returns to normal and you can continue using it. Your relationship with the lender isn't considered to have reached a point of no return.

Defaults mean that you've continually failed to make payments on time and haven't been able to come to an agreement to repay with the lender to the point that the lender considers the relationship with you to have broken down past the point of no return. The account can never be brought back to use as normal irrespective of how much you pay and how quickly, once it has defaulted.

CCJs mean that communications between you and a lender have reached such a desperate stage of non-communication and non-payment that they only way they see able to obtain payment from you is to commence court action, which you failed to defend.

A couple of brief AP markers from over three years ago aren't going to have any notable negative impact on your creditworthiness whatsoever. 

If they were within the last 12 months, then yes a lender might raise an eyebrow but in your instance I don't see it having any impact on you.

APs in no way have as much of a negative impact on you as sustained arrears, defaults, or CCJs. Whoever told you they do, are wrong. 

Just a little bit of anecdotal evidence - my mother entered into an AP with Barclaycard which lasted in fact five years, however she was able to obtain prime credit elsewhere even during the arrangement. She'd entered into the AP with Barclaycard to save interest through a period of poor income - they frose interest on the account, but managed to transfer the balance to a 0% card whilst still in the AP with Barclaycard (Creation Mastercard).

Once she'd paid off the Creation card Barclaycard welcomed her back as a new customer and happily approved her for a Platinum Simplicity card with 7.9% APR and £3,000 limit (this was a few years ago, no such APR like that any more, though she still has the card today with a sub 10% APR).

Has anything actually happened to you recently in terms of credit declines that lead you to believe your history might be having an impact on you?

annetheman

Fighter1986 said:

Just to correct some misinformation - 

Arrangements to Pay aren't as damaging as arrears, defaults, or CCJs. An AP marker means that you've been honest and upfront about your circumstances, and the lender in question has agreed to temporary conditions on your account, after which you brought the account back up to date, and it remained open as usual.

Arrears / missed payments mean you haven't told a lender that your circumstances have changed for the worse and entered into an agreement with them. You've simply not paid the agreed amount on time. Once arrears are brought back up to date in a timely manner, the account returns to normal and you can continue using it. Your relationship with the lender isn't considered to have reached a point of no return.

Defaults mean that you've continually failed to make payments on time and haven't been able to come to an agreement to repay with the lender to the point that the lender considers the relationship with you to have broken down past the point of no return. The account can never be brought back to use as normal irrespective of how much you pay and how quickly, once it has defaulted.

CCJs mean that communications between you and a lender have reached such a desperate stage of non-communication and non-payment that they only way they see able to obtain payment from you is to commence court action, which you failed to defend.

A couple of brief AP markers from over three years ago aren't going to have any notable negative impact on your creditworthiness whatsoever. 

If they were within the last 12 months, then yes a lender might raise an eyebrow but in your instance I don't see it having any impact on you.

APs in no way have as much of a negative impact on you as sustained arrears, defaults, or CCJs. Whoever told you they do, are wrong. 

Just a little bit of anecdotal evidence - my mother entered into an AP with Barclaycard which lasted in fact five years, however she was able to obtain prime credit elsewhere even during the arrangement. She'd entered into the AP with Barclaycard to save interest through a period of poor income - they frose interest on the account, but managed to transfer the balance to a 0% card whilst still in the AP with Barclaycard (Creation Mastercard).

Once she'd paid off the Creation card Barclaycard welcomed her back as a new customer and happily approved her for a Platinum Simplicity card with 7.9% APR and £3,000 limit (this was a few years ago, no such APR like that any more, though she still has the card today with a sub 10% APR).

Has anything actually happened to you recently in terms of credit declines that lead you to believe your history might be having an impact on you?

Thank you, this makes much more sense! As of course, they have different meanings, so it makes sense that they have different "stories" that they tell a potential creditor about you, and thus different impacts.

Yes, thank you! The thing that happened was that I was approved for a mortgage pending satisactory EWS1 with Leeds pre-pandemic, then a 9 month delay in getting EWS1 meant that I had to reapply - at that point, I was rejected at AiP the second time around without even a soft search.

Broker told me it was because they had "tightened criteria so I may have just met it pre-pandemic and now I don't" so assumed it was the ARs. Although, the broker did spell my name wrong on my second Agreement in Principle (approved, with Kent Reliance), so it could've been that...

Other than that, like your mother, I have had absolutely no issue gaining credit with the ARs, in fact I didn't even realise I had them (I had agreed them but didn't realise they are an "official" marker on the credit report at the time) as I have never been declined for credit and have applied for 2 credit cards and an overdraft extension over the 3 years since then. So it gave me what I believed to be a false sense of my own attractiveness to lenders

Fighter1986

I just had to go and check what an EWS1 is... Oh boy.

Sounds like that... And your brokers inability to spell, are likely your biggest hindrances rather than anything in your credit history.

I wish you the best of luck moving forwards 🙂👍