Wife credit rating plunge - completion due

AAGG1234

With just over a week to completion of our house, I checked our credit reports to see if all still good. Got shock of my life when wifes score plunged by 100 (good to fair) because her credit utilisation shot up to 38% from usual average 15%. And she went over the card limit of £1000 by £75 as well. We rang my broker immediately and he advised 1) call hsbc credit card to get current balance updated on experian and pay any current debts (it was xmas so wife spent but paid it all off on 26th) 2) contact Experian first thing on Monday to inform them of situation and see what they can do to further speed things. Hsbc advised within 3-6 working day’s it should be actioned their side.

With credit utilisation, credit scores can improve instantly if it goes back below 20-25% compared to 3-6 months wait time for hard searches and new accounts to expiry before credit score improves.
The next update from hsbc to Experian is within 10 days of 10th January so I expect hsbc and Experian to have this update before completion date. 

The broker did also advise me when final check is done, it’s more for to ensure nothing material changes (late payment, CCJ, new monthly commitment etc which thankfully we don’t have) and he said as it’s a human, not computer doing final review (it happens to be HSBC lending the money), he said it should still be ok but wouldn’t be surprised if a referral was raised or further questions are asked before hsbc release the funds but we should be in good position to clarify anything they need.
I suppose my question is have any other brokers or individuals been in same circumstances and what was the outcome. Helpful input is appreciated. 

[Deleted User]

Ignore the credit scores.  No one is seeing or using them.

The overlimit is the problem.  Her timing is not great, but on a well managed file, it may not be a deal breaker.

AAGG1234

Deleted_User said:

Ignore the credit scores.  No one is seeing or using them.

The overlimit is the problem.  Her timing is not great, but on a well managed file, it may not be a deal breaker.

My broker said near enough the same thing to me in terms of scores and he knows our files show we are very good in terms of payment times and old accounts. But he is adamant that if at least this is not sorted by time lender does final check before releasing funds, he is expecting a referral email asking for more information.  By then, I would have a monthly statement showing credit card is NIL balance so should be ready.
You read all these horror stories of last minute pull outs by lender now I am in category of risk for that now.

MattMattMattUK

AAGG1234 said:
But he is adamant that if at least this is not sorted by time lender does final check before releasing funds, he is expecting a referral email asking for more information.  By then, I would have a monthly statement showing credit card is NIL balance so should be ready.

You will probably have to do that if your completion is within the next month and may well have to provide some extra details for the underwriter to have a second look as updates are slow at the moment and it may well flag something in the automatic system. 

Have you got any other credit card debt at the moment and if you do is it higher than at the time your mortgage was approved? When my mortgage was between exchange and completion by broker advised me that it was safer to just not use my credit cards at all, a better safe than sorry approach. I would recommend you do not put anything else onto credit cards before you complete if at all possible. 

AAGG1234

MattMattMattUK said:

AAGG1234 said:
But he is adamant that if at least this is not sorted by time lender does final check before releasing funds, he is expecting a referral email asking for more information.  By then, I would have a monthly statement showing credit card is NIL balance so should be ready.

You will probably have to do that if your completion is within the next month and may well have to provide some extra details for the underwriter to have a second look as updates are slow at the moment and it may well flag something in the automatic system. 

Have you got any other credit card debt at the moment and if you do is it higher than at the time your mortgage was approved? When my mortgage was between exchange and completion by broker advised me that it was safer to just not use my credit cards at all, a better safe than sorry approach. I would recommend you do not put anything else onto credit cards before you complete if at all possible. 

Exchange and completion will be on 12th.

At time of application, there was balance on card of £450 I believe. She’s had card since 2011 and has never missed a payment and uses it regularly. Plus credit card provider is same bank hsbc that is given the mortgage. She also opened a new BT broadband account (changed from crap EE) and new bank since mortgage offer but as they are not material financial commitments, these are trivial. So factor in all this plus getting hsbc/Experian showing nil balance to update correct position should hopefully solve issue. I was nearly having panic attack this morning over this issue but now been reassured by responses and my broker.  Fingers crossed even if it gets referred, it should all go well.

MattMattMattUK

AAGG1234 said:
Plus credit card provider is same bank hsbc that is given the mortgage. 

On that basis what is on the credit record will make little difference, their own data will likely take precedent.

AAGG1234 said:
Fingers crossed even if it gets referred, it should all go well.

I hope you do not have any issues and hopefully if HSBC have any they will raise them in this coming week to make it easier to get resolved. Once it is all done and dusted pop back and let us know (hopefully) that it has all gone ok.

AAGG1234

MattMattMattUK said:

AAGG1234 said:
Plus credit card provider is same bank hsbc that is given the mortgage. 

On that basis what is on the credit record will make little difference, their own data will likely take precedent.

AAGG1234 said:
Fingers crossed even if it gets referred, it should all go well.

I hope you do not have any issues and hopefully if HSBC have any they will raise them in this coming week to make it easier to get resolved. Once it is all done and dusted pop back and let us know (hopefully) that it has all gone ok.

Thank you. Fingers crossed indeed. Going to be very interesting next 2 weeks.. my main task is getting hsbc/Experian updated to correct balance even thought your probably right hsbc will use their own data but would be comfortable hsbc balance is shown correctly on Experian.

DCFC79

Poor financial management from your wife, yes its only £75 but how did she go over the limit.

AAGG1234

DCFC79 said:

Poor financial management from your wife, yes its only £75 but how did she go over the limit.

Xmas presents 🤦‍♂️. I dont think the £75 is the main issue, it’s rather the credit utilisation was over 25% in this recent (6th december updated) credit report - 38% CU. I’ll be on phone to hsbc and Experian every day to get the correct balance updated ASAP on Experian. However I think the credit card and mortgage offer being with hsbc should be get out of jail card given it’s internal data they already have and they can see payments are settled in full each month. 

MattMattMattUK

AAGG1234 said:

I dont think the £75 is the main issue, it’s rather the credit utilisation was over 25% in this recent (6th december updated) credit report - 38% CU. 

The issue is not the credit utilisation, the issue will be that she went over the credit card's credit limit, it shows poor financial management skills as far as lenders are concerned. 

AAGG1234 said:
I’ll be on phone to hsbc and Experian every day to get the correct balance updated ASAP on Experian. 

You will be wasting your time and theirs. HSBC will update the data when they send the next batch, Experian will update the record when they have received and processed that batch, nothing you do or say will change or in any way influence that process.

AAGG1234 said:
However I think the credit card and mortgage offer being with hsbc should be get out of jail card given it’s internal data they already have and they can see payments are settled in full each month. 

As mentioned before, HSBC will use their own records in relation to HSBC lending data and ignore what is on the credit report in relation to HSBC. That will not be a get out of jail free card, it is likely there will still be an over limit marker placed on your credit record, however I would strongly suspect that they will let it pass if, as you said previously records are spotless and the balance was brought under the limit immediately. 

Also, just to be safe, I would recommend neither you nor your wife use your credit cards before the mortgage is completed, it just is not worth the risk. Brokers usually state quite clearly that it is unwise to accumulate credit card debt between exchange and completion, it is just not worth the risk of screwups. 

AAGG1234

MattMattMattUK said:

AAGG1234 said:

I dont think the £75 is the main issue, it’s rather the credit utilisation was over 25% in this recent (6th december updated) credit report - 38% CU. 

The issue is not the credit utilisation, the issue will be that she went over the credit card's credit limit, it shows poor financial management skills as far as lenders are concerned.  

AAGG1234 said:
I’ll be on phone to hsbc and Experian every day to get the correct balance updated ASAP on Experian. 

You will be wasting your time and theirs. HSBC will update the data when they send the next batch, Experian will update the record when they have received and processed that batch, nothing you do or say will change or in any way influence that process.

AAGG1234 said:
However I think the credit card and mortgage offer being with hsbc should be get out of jail card given it’s internal data they already have and they can see payments are settled in full each month. 

As mentioned before, HSBC will use their own records in relation to HSBC lending data and ignore what is on the credit report in relation to HSBC. That will not be a get out of jail free card, it is likely there will still be an over limit marker placed on your credit record, however I would strongly suspect that they will let it pass if, as you said previously records are spotless and the balance was brought under the limit immediately. 

Also, just to be safe, I would recommend neither you nor your wife use your credit cards before the mortgage is completed, it just is not worth the risk. Brokers usually state quite clearly that it is unwise to accumulate credit card debt between exchange and completion, it is just not worth the risk of screwups. 

They may not even do a final credit check seeing it’s HSBC I do all my primary banking with. And they can see all the ins and outs. But I can’t assume that. Not in this climate. 

We have stopped using credit cards as of today after this credit utilisation issue and balance is NIL.  Even if my wife didn’t go over £75, credit utilisation would of still dropped to same level it is now so I would be in same issue. However I get the point about “marker” being credit limit £1000 and balance £1075 as this will be shown on history of the card use. 

With HSBC/Experian updating, My broker has done this with customers prior. If the update IS DUE with credit report (which my wife is), you can push a provider to send update as separate case (a log which back office deals with) and Experian can chase this up as well if you bother them enough. It would take about a week to get all done.

what’s done is done now and I have anxious 10 day’s in front of me. 

PS I am in 3 way chain where I’m in the middle. Hence the additional stress 🤦‍♂️