Chances of remortgaging

premiumz

Hi,

I wont go into the full story here but I was very unfairly charged by a company which resulted in a default on my account. (I closed my account with the company but they failed to do this and sent the bill to an old address of mine years later and when I didn't respond as I had no idea of it, they sold the bill to a debt collection agency) This resulted in hurting my credit score due to a default put on my account.

So that hammered by score down from being in the green to being in the red. I've since managed to get it back to orange.
Right now my score is 694. (was 700)
I had a credit card with a few thousand left to pay on it and I read some advice online that by paying it off and closing it, it could boost my score. I did that and it hurt my score? It removed 6 points. Bit annoying.

I want to remortgage our house but I'm worried my credit score might not be good enough, although I pay all my bills on time and earn a decent income.
I'm thinking about getting another credit card to help put my score back up before trying to remortgage.

Is this a good idea or a bad idea?

I would have thought having less debt would up my chances in getting approved but it seems to have hurt my score. So is getting a credit card to try and boost my score a good idea before applying?

Thanks

K_S

@premiumz First off I want to stress that your Experian/Clearscore/Credit-karma score moving up or down has no relevance at all to your mortgage application. All that matters is what's in the credit report itself. So please don't go chasing after how to improve that number.

When was the default registered, amount and is it satisfied?

One default on its own is unlikely to stop you from remortgaging. However, what kind of lenders and rates you will have access to will depend on the details of the default, what your credit reports look like and the rest of your circumstances/requirements.

premiumz

K_S said:

@premiumz First off I want to stress that your Experian/Clearscore/Credit-karma score moving up or down has no relevance at all to your mortgage application. All that matters is what's in the credit report itself. So please don't go chasing after how to improve that number.

When was the default registered, amount and is it satisfied?

One default on its own is unlikely to stop you from remortgaging. However, what kind of lenders and rates you will have access to will depend on the details of the default, what your credit reports look like and the rest of your circumstances/requirements.

So do you think getting a credit card before I try to remortgage will work against me as I will have taken out more debt?

The default was only £20-30. Something like that. The worst part is they did it to me 3 times over 3-4 years. I stopped using their services years ago. Closed my account. They failed to close it, failed to get in contact with me. Each time I paid the bill with the debt collection agency and each time had a conversation with the company verifying "Yes sir, THIS time your account is closed and there is nothing else to pay" and another year passed and the same thing happened again. But once they sell that debt to the debt collection agency they always say there's nothing they can do now. Pathetic.

I'm not one for court action etc as I don't need that stress. But I pay my bills and I was unfairly charged and penalized for the above. I don't want to get into it though as it makes my blood boil every time I think about it.

The default I got hit with recently was at the start of the year I believe but they removed it as the debt collection agency sided with me, which was a nice surprise. This lifted my credit score from red to orange as the default was on there before they removed it. So I am assuming the previous default might still be on there? Which I think was around 2 years ago.

[Deleted User]

An account can only be defaulted once and will drop off your files six years from that date.

As above, your credit score has no bearing on your ability to get credit, so forget about that entirely. As you've seen, clearing debts reduces your score, which is obviously not how a lender would interpret a reduction in debt.

K_S

@premiumz As long as you're not running up debt, whether you get a credit card or not should have no material impact on your mortgage application.

With respect to the default, you need to get a copy of your credit reports - ideally Experian, Equifax and TransUnion or at least Equifax and Experian, and review them. You can get statutory reports for free or check MSE Credit Club (Experian), Clearscore (Equifax) and Credit Karma (TransUnion) for free.

premiumz

Deleted_User said:

An account can only be defaulted once and will drop off your files six years from that date.

As above, your credit score has no bearing on your ability to get credit, so forget about that entirely. As you've seen, clearing debts reduces your score, which is obviously not how a lender would interpret a reduction in debt.

So that must be what's holding my score down then if it takes 6 years to come off. Makes sense. Do you think with that in mind it will prevent me from remortgaging? On the basis everything else is fine.

premiumz

K_S said:

@premiumz Whether you get a credit card or not should have no material impact on your mortgage application.

With respect to the default, you need to get a copy of your credit reports - ideally Experian, Equifax and TransUnion or at least Equifax and Experian, and review them. You can get statutory reports for free or check MSE Credit Club (Experian), Clearscore (Equifax) and Credit Karma (TransUnion) for free.

I'll hold off on the credit card for now then as It will make no difference. I will look to sign up the premium membership on Experian to get my full report

K_S

premiumz said:

K_S said:

@premiumz Whether you get a credit card or not should have no material impact on your mortgage application.

With respect to the default, you need to get a copy of your credit reports - ideally Experian, Equifax and TransUnion or at least Equifax and Experian, and review them. You can get statutory reports for free or check MSE Credit Club (Experian), Clearscore (Equifax) and Credit Karma (TransUnion) for free.

I'll hold off on the credit card for now then as It will make no difference. I will look to sign up the premium membership on Experian to get my full report

@premiumz There's no need to sign up for any paid service, you can get the full report for free using the statutory report 
https://www.experian.co.uk/consumer/statutory-report.html

At the same time, you can also sign up for the MSE Credit Club which uses the same Experian data

https://www.moneysavingexpert.com/creditclub/

[Deleted User]

premiumz said:

Deleted_User said:

An account can only be defaulted once and will drop off your files six years from that date.

As above, your credit score has no bearing on your ability to get credit, so forget about that entirely. As you've seen, clearing debts reduces your score, which is obviously not how a lender would interpret a reduction in debt.

So that must be what's holding my score down 

D'oh!
            

[Deleted User]

premiumz said:

K_S said:

@premiumz Whether you get a credit card or not should have no material impact on your mortgage application.

With respect to the default, you need to get a copy of your credit reports - ideally Experian, Equifax and TransUnion or at least Equifax and Experian, and review them. You can get statutory reports for free or check MSE Credit Club (Experian), Clearscore (Equifax) and Credit Karma (TransUnion) for free.

I'll hold off on the credit card for now then as It will make no difference. I will look to sign up the premium membership on Experian to get my full report

Check all three, not just Experian data. Remember that you're looking at the data, not the pretend scores.

premiumz

K_S said:

premiumz said:

K_S said:

@premiumz Whether you get a credit card or not should have no material impact on your mortgage application.

With respect to the default, you need to get a copy of your credit reports - ideally Experian, Equifax and TransUnion or at least Equifax and Experian, and review them. You can get statutory reports for free or check MSE Credit Club (Experian), Clearscore (Equifax) and Credit Karma (TransUnion) for free.

I'll hold off on the credit card for now then as It will make no difference. I will look to sign up the premium membership on Experian to get my full report

@premiumz There's no need to sign up for any paid service, you can get the full report for free using the statutory report 
https://www.experian.co.uk/consumer/statutory-report.html

At the same time, you can also sign up for the MSE Credit Club which uses the same Experian data

https://www.moneysavingexpert.com/creditclub/

Just tried to order a copy through the experian link and it says it couldn't find my address  The roadblocks just keep on coming! Will try through another way