Car loan added to file. But I cancelled.

LTNRW

I recently applied and was accepted for finance on a car.

I returned the car to dealer within 7 days as it wasn't good enough.
And canceled the credit agreement.
This was approx 2 weeks ago

Now the company have added an account to my file today

I am in the middle of a mortgage application 
And the bank hard searched me 2 days ago. Before this new account was added.

I dont want this new account to look as though  I have just taken out a large finance agreement while applying for a mortgage.

The bank have seen my file. Seen my payslips etc and asked all their questions. I had my agreement in principle already.

So .. 

Do I tell my mortgage handler about this account to give them a heads up and that it isn't an actual agreement that is "live"

Or do I let it go. As the company will eventually close the account.. ( I have emailed them to remove the account ) 

Is the bank likely to see this or does a hard search only show what was on the report at that time?

Are they likely to hard search again after already hard searching and going through my files already.? 

Thanks all.

SeanG79

What are you doing for a car now, do you not need to finance another one? It seems odd that 2 or 3 weeks ago you needed car finance, and now you don't. If the car didn't have issues you would have kept it, knowing you were due to apply for a mortgage, what was your plan then?

CRA's take time to update - the car finance agreement was probably scheduled to be loaded prior to you returning the vehicle and withdrawing from the finance agreement. The agreement will likely be removed when next updated, so should not impact on the current mortgage application unless they need to do another search now as opposed to prior to completion (if at all).

Brie

You say you cancelled the finance agreement but how, specifically, did you do that?  Did you just talk to the people where you bought the car?  Or did you go directly to the finance company?

When I worked for an insurance company years back people rarely understood that if they paid monthly rather than all up front that they were entering into a credit agreement which was separate to the insurance itself.  They would cancel their direct debit thinking that cancelled the insurance or even if they cancelled the insurance they would wonder why there was still money to be paid.  

Even assuming you have cancelled in the correct way you may owe some fees/balance if you went beyond the cooling off period or potentially the car sellers assume they are due 7 days worth of something for the fact you had the car during that time.

PRAISETHESUN

It takes time for these things to process through the credit reporting system - usually 4-8 weeks or so before changes are record on your files. The finance agreement will be cancelled straightaway but will take some time until it is reported as closed on your file. I'm pretty sure the searches will stay regardless of you cancelling though.

It's generally a bad idea to be taking out additional credit around the time of a mortgage application though. An additional search means a change in circumstances, so even though you've already been checked, they now need to re-assess you. It's down to your mortgage provider how they will view the extra search.

LTNRW

To clarify.

I wasn't going to be applying for a mortgage up until this weekend just been
And so the car finance being taken out a month ago was just that. 
I had to intention of a mortgage.

But. The car was returned 
Both dealer and finance company were aware before returning and I confirmed with the finance company upon returning that it had gone back.

No deposits were paid
No fees or cancellation charges
Was within the cool off period.

Its just a pain its opened up a file now even though there will never be any owing monies.

But my lender could see 25k finance and freak
..but of course I can prove that I've since returned the car and canceled the finance should they need it.

dil1976

Sorry slightly off topic here, but how do you go from no intention of a mortgage to taking one out in such a short space of time? It is hardly like buying a house is done on a whim.

LTNRW

Basically,  a relative is moving away and offered the house to me. Very good location and a house I've always said I'd buy if I could..

We were headed down private equity transfer
But she wanted to sell via mortgage.

And here we are.

MalMonroe

A few years ago I applied for car finance and was accepted but I got cold feet because during a second inspection and test drive I noticed some things on the car that I should have noticed first time around. The gearstick was loose and the handbrake also felt loose. When I told the salesman he said, "oh yes, those are common faults on these cars". Great. 

So I didn't take either car or loan and I didn't have the car for any period of time at all.

However, although I declined the offer, the loan company still put a hard search on my credit file and would not remove it, even though I asked them several times in writing and by email.  

The loan company said that I had successfully applied for a loan and the fact that I didn't want it was no fault of theirs. 

My circumstances were the same as yours - no deposits were paid, no fees or cancellation charges and it was within the cooling off period. Loan company said they did not have to remove it and they were not going to because they had had to carry out a search of my credit report, whatever the outcome.

Although others are saying that the hard search will be removed when your credit report is updated, once a hard search has been put on your credit report, it's really difficult to get it removed.

I have in the past managed to get a hard search taken off my credit report but I had to go through the Financial Ombudsman and prove that the hard search had been carried out in error. And the search stayed on my report for a short time while I was fighting to get it removed.  

Unfortunately, your hard search was not done in error. But it'll drop off in 12 months. 

Your mortgage lender has already seen your credit report and found you to be satisfactory.

Even though a hard search has been done by the car finance people, all lenders will see is that you made an application. They won't know if it was successful or unsuccessful or how much it was either. 

I wouldn't worry about it, especially as you have proof that the agreement was cancelled, just in case you need it.. 

sourcrates

I don`t think its the hard search the OP is bothered about, its more the fact a 25k loan is being reported on his credit file.

One hard search means nothing in the long run, and the account should be deleted at the next update, if not, get writing.

molerat

I don't think anyone has said the hard search will be removed - because it won't, it is a statement of fact.  If the finance is cancelled within the cooling off period then any trace of the actual account should be removed in accordance with the CCA.