Refused DIP due to credit rating
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Bobblin123
Posts: 1 Newbie
Hi, advice needed please...
Just been refused AIP with Halifax, nothing adverse on credit files but mortgage advisor believes it due to ‘financial stress’ as currently using 80% of available credit. Do I take out a loan to consolidate credit cards & overdraft?? Will this negativity impact trying to get an AIP in the near future?
Just been refused AIP with Halifax, nothing adverse on credit files but mortgage advisor believes it due to ‘financial stress’ as currently using 80% of available credit. Do I take out a loan to consolidate credit cards & overdraft?? Will this negativity impact trying to get an AIP in the near future?
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Comments
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You need to clear some of that debt, taking on more debt to reduce the debt is rarely sensible. How much is it compared to your income ? How much are you reducing it by monthly ? They obviously feel you cannot afford to service the debt as well as a mortgage.0
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Taking a loan out means you still have the debt.
You need to clear it down by throwing as much as you can at it0 -
Bobblin123 wrote: »Hi, advice needed please...
Just been refused AIP with Halifax, nothing adverse on credit files but mortgage advisor believes it due to ‘financial stress’ as currently using 80% of available credit. Do I take out a loan to consolidate credit cards & overdraft??
How does that help anything? You still owe the same amount of money but just to different people. Those who consolidate are the ones who are at more risk of getting themselves even further into debt, the whole "well we managed to consolidate so now we're only repaying £100 a month instead of £300 a month so we can afford to get a new car on PCP" mindset then bam you're not just £10k or whatever you were in debt, you're now £25k in debt.0 -
In same position as you, had around 85% credit card utilisation but total credit balance only around 20% of gross income. No overdraft usage. Applied online for DIP at a few banks but all were rejected.
I ended up taking out a loan and repaying most of the debt with it, bringing my total utilisation down to around 35%. I found that once my file was updated, I was approved for an 85% mortgage with Halifax and 90% with NatWest according to their soft checker. I was previously rejected by both banks, even though the card repayments were well within my budget.
Other than a small decrease in total debt, there were no other changes to my credit file. So it looks like credit utilisation is a significant factor as far as HBOS/NatWest are concerned.
It should be noted I had no adverse on my file (no missed payments, etc.). The only negatives flagged by Experian were due to the relatively high utilisation.0 -
AngusMcFilth wrote: »In same position as you, had around 85% credit card utilisation but total credit balance only around 20% of gross income. No overdraft usage. Applied online for DIP at a few banks but all were rejected.
I ended up taking out a loan and repaying most of the debt with it, bringing my total utilisation down to around 35%. I found that once my file was updated, I was approved for an 85% mortgage with Halifax and 90% with NatWest according to their soft checker. I was previously rejected by both banks, even though the card repayments were well within my budget.
Other than a small decrease in total debt, there were no other changes to my credit file. So it looks like credit utilisation is a significant factor as far as HBOS/NatWest are concerned.
It should be noted I had no adverse on my file (no missed payments, etc.). The only negatives flagged by Experian were due to the relatively high utilisation.
Hi do you mean you got the AIP after you had also paid off the loan, or before? I am curious to know how much you had reduced the overall debt down by (not just the credit cards) before you got accepted as I am in a similar position and repaying as much as I can at the mo. Thanks0
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