new mortgage with one partner with credit card defaults

tp555

Hi, my husband and I are looking to move house and our current lender, Natwest had declined a new mortgage. My husband has a fantastic credit file. I defaulted on 6 credit cards in 2024, I have 3 remaining. 2 were  sold to Lowell who were not able to provide proof when I asked for a CCA and they closed the accounts and said the defaults would be removed. The one with Very was cancelled by them and removed. This left a Marbles one, which I complained about to the financial ombudsman, who found in my favour and they had to return all the interest which meant it went down from £8500 to £1200. Then the Sainsbury one was sold to LC Asset and managed by Link and is currently £5800. and the Next account one is £4275. We have approached a mortgage broker, Habito, who say the best we can get is a 6.75% one with Pepper mortgages. He said that the defaults that had been sold showed up twice on my file and that is how the mortgage people would see them, so it looks as if I have more than I do. I'm wondering if we would be better off going to a fee charging specialist, (Habito is free) and if anyone knows a good one? When I look at my credit file I can only see 3 defaults totalling £11,300 so I don't understand why the broker said 6 were showing. I know that is bad enough though.

Brie

Can't help with the mortgage itself but I do believe I know why defaults will seem to appear twice on a credit file.

What I've seen on some is that there will be the default with the original creditor (i.e. Next) and that will show as being in arrears, non payment for a few months and then may show as a zero balance.  This is when they have sold the debt or passed it to a collection company.  So say that passing along happened in March.  Lowell (or whomever) will then appear as a new creditor for the same amount, normally from April.  But the Next one might not update the amount for a couple of months so there will be an overlap where there appears to be twice as much debt than there really is. 

I believe as well that the credit reports that are available to people so they can check their own files are less complex/detailed than the ones that companies buy to look at.  But a lot also depends on how frequently a business downloads its information to the credit referencing agencies so if Lowell is updating monthly but Next is only updating once every three months the information will be less accurate than might be desired. 

Meanwhile are you registered to vote?  Do you have a lot of other credit showing on your file even if you are not using it?   So a credit card with a limit of £5k even if not being used is a risk to any creditor as you might go splurge on a holiday tomorrow.  Likewise any overdraft.  Also watch out for other credit agreements such as mobile contracts, monthly paid motor insurance, or broadband & TV packages.  You might find that your credit file will look better if you move things like this to your husband as he appears to be less of a risk - even if it's all being paid out of the same bank account. 

Anything will take time to update so maybe you'll need to put your plans to move on hold until your defaults are a bit older and less of a concern.  Hope you get it sorted out eventually!!  

ACG

As Brie says, when the account defaults and gets sold on, it then shows as a second default with the debt collection company. 

High street lenders would normally work on the assumption there are 2 defaults. This is because they credit score applications and their computer will pick up the 2 defaults. 

There are other lenders who will sit there and see they defaulted on the same day for the same amount (sometimes it can be a pound different) so easy to see that they are the same debt and so only count it as one. 

It might also be worth getting either your checkmyfile credit report or looking at equifax, transunion and experian credit reports as sometimes they can display different information. The other thing that might be playing a part is that if you get the debt removed it can take a few weeks to go through. So it may well be that it has not updated on the lenders credit check yet.