A reader, Mr D, asked:
My partner and I have a combined income of £56,000, We have a deposit of £28,000 (inheritance) and are looking to become first time buyers at a price of £230,000. We have defaulted debts that are being paid off, and previous history of payday loans from over 2 years ago from a time when our financial situation was much more difficult.
The defaults are about 18 months old. We started to try and tidy things up when we knew the money was coming to us. We currently owe around £9,000 on the defaulted debts.
I have an active credit card, and we both have a mobile phone contract in our own names, but that’s all apart from the defaults.
What are the chances of us being offered any kind of mortgage at a reasonable rate?
Contents
When is a default “recent”?
Obviously a default a few months ago is recent and one 5 years ago is old. But many people have defaults in the middle, like Mr D.
Mortgage lenders in general care about two things:
- when did the default happen? the longer ago it was the less likely it is to show you have current problems.
- when did you repay the debt? High street lenders do not like you to have unpaid defaults, even small ones. And the longer ago the debts were cleared, the more obvious it is that you are now fine.
Pre pandemic, there was a common approach used by many high street mortgage lenders that defaults were OK on your credit record if they were all over three years old AND they had been repaid for more than a year. Mr D currently fails on both of those requirements.
Now, mortgage rates increasing in 2022-23, some lenders are being tougher on assessing affordability. To get an OK rate from a high street bank it is good to have settled the debts at least two years before the application.
With recent defaults, your only option may be a bad credit lender
The suggestions below will take some time to improve your mortgage chances.
If Mr D wants a mortgage straight away, he will have to go to a “bad credit” broker. There are three big problems with doing this.
1. It costs more
The fees to arrange the mortgage will be larger. Be very clear about what the fees are before you sign anything. Can you get your money back if a mortgage is not arranged?
Also the mortgage is likely to be at a much less good rate.
2. You may not be able to remortgage with a normal lender
Some people are told:
“This will just be for a couple of years, then you can re-mortgage with a high street lender at a better rate.“
You can’t rely on that happening!
Your own financial situation may be more difficult in a few years – perhaps you have a baby on the way which will affect the mortgage affordability calculations.
And even if you are fine, who knows what the mortgage market will be like in a couple of years after the first lockdown? Will the economy and lending be back to normal? If house prices fall from their current highs, your 15% deposit may reduce to 5 or 10%
3. If you can’t remortgage, your interest rate may jump a lot
If you can’t remortgage at the end of the fix, then you will be stuck on your lender’s standard variable rate (SVR).
Anyone thinking that they can manage a bad credit mortgage needs to ask the lender what their SVR is at the moment. If interest rates go up over the next couple of years – which is what most economists are predicting – SVRs will also go up.
And there is the horror scenario that you may find a bad credit lender’s SVR is increased even when other mortgage rates are dropping. This happened to many people in 2009 and 2010.
Sorting out the old debts
Paying off the defaults
Paying off the defaults is the first key step towards getting a mortgage at a reasonable rate from a high street lender. These debts don’t have to be paid in full – a partial settlement may be acceptable to some mortgage lenders.
You want to pay them off as soon as possible so a mortgage lender can see that your problems were all in the past.
When the defaults have all been settled more than a year ago and you have had a year free of any credit record problems, you are more likely to be able to get an OK mortgage offer.
If Mr D already has the inheritance in his bank account, then it would be best to use some of that right now and repay the defaults, then start resaving the deposit money that has now been reduced.
Say you can afford to pay £400 a month off your debts – that would take 15 months to clear the defaults. If you clear them now and then save that £400 a month, in 15 months time you will have your current deposit back, but your credit records will be looking much better as you will have had 15 months clear of any problems.
Getting defaults removed by winning affordability complaints
If you can win an affordability complaint, defaults and missed payments are usually removed. And you may get the balance reduced or cleared or even cash refunded.
For affordability complaints what matters is your financial situation at the time you took the loan or the credit card lender increased your credit limit, not what your finances are like now. And you can win a complaint even if you made every payment on time, because you may have been robbing Peter to pay Paul, so your debts were getting worse.
See Asking for refunds, which has a different article for each type of debt. This isn’t fast, but if you are looking at some time before a mortgage as your record is too poor, it’s worth trying to clean up as much as you can.
Defaults not showing on your credit record also need to be settled
This reader doesn’t have old defaults, but some people will have debts where the default was over 6 years ago so it has already dropped off their credit record.
These old debts still matter if they haven’t been settled, see “Can mortgage lenders see old debts, no longer on my credit record? for details.
Check the default date is correct
Paying off the defaults doesn’t actually help your credit rating and it won’t make the defaults disappear. They will stay for six years from the first default date.
So it’s worth checking if you think the default date is correct. If any of them should have been earlier, see if you can get the default date changed as that means the debt will vanish sooner.
It also helps if the defaults are older. A mortgage lender would rather see you had problems 5 years ago than problems last year.
What about old payday loans?
If the payday loans are already over two years old, most mortgage lenders won’t care that much about them. And if you are taking the next year to improve your general position then they are getting even older.
However, how much did you use payday loans? If it was a lot for a period, then you should read my article on Can I get a payday loan refund? and see if you might be able to get any compensation. If you do win a complaint about these, the lender will sometimes delete the record from your credit file and will always delete it if there is a default or a missed payment.
Any money you can get back will mean you have a bigger deposit – and the larger your deposit is, the more lenders there will be that may lend despite the defaults on your credit records.
Lifetime ISAs
If Mr D clears some of the old debts and then wants to rebuild their deposit, the best way would be by regular monthly saving into a Lifetime ISA. You can have one if you are aged 18-39 and this will be the first property you buy. MSE has a good guide to LISAs.
Whilst you are saving there four good things happen:
- the defaults are getting older;
- your deposit is getting bigger
- you are getting a bonus from the government; and
- it is showing a future lender that your money problems really were in the past and you can afford to put money aside from your income.
Of course during this period you also need to be fanatical about making sure all your credit cards and bills are paid on time. The last thing you want is a new late payment showing on your file…
Then talk to a broker
When you have saved your deposit up again and the defaults have got older, you need to talk to a mortgage broker.
Some high street lenders say they won’t consider a mortgage with defaults in the past three years. Some won’t lend to you at all with defaults – you need to avoid applying to these lenders. A broker will be able to advise you – at this point though you shouldn’t need to go to a bad credit broker.
In late 2022, there are some 5 % mortgages on offer, but you need a very clear credit record.
35-40 year mortgages – be careful!
Remortgage and save money when a fix ends
88 ideas that can save you money!
Ciaran says
I went for a mortgage about 6 months ago and got rejected cause off 3 defaults I’ve paid them in full and sent away letters to get my credit report updated, I’ve went to another mortgage place and was told I can’t go for one till the 6 years are up and thats on November but I’m getting married in December and we really need a house before then Is this true will no one be able to get me a mortgage thanks hope to hear from you soon.
Sara (Debt Camel) says
It is usually possible to get a mortgage from some lenders if your defaults are more than 3 years old (yours are) AND they have been repaid more than a year ago. I’m not sure when that will be for you – it may not be until November when the debts disappear anyway. If it’s close – the one year point would be In October- then it may be better to wait until after November because then you will have a wider range of possible lenders to choose from. You need to talk to a mortgage broker about your options.
Sara says
I had 2 defaults registered on my credit file 4 years ago. One was for 18,000 and the other was for 11,000. Both were unsecured loans and I repaid them in full 2 years ago. Both accounts now show as satisfied. My husband and I went for a mortgage last year but were declined. We have had no other adverse credit since these defaults. The only credit we have is hire purchase on a car which we pay in full every month and have never missed a payment or been late in paying it. We are considering applying for a mortgage again this year for a new property on the help to buy scheme. What do you think our chances are of getting approved? We are both employed full time and have worked with the same employers for over 5 years. We are on the electoral register at our address.
Sara (Debt Camel) says
this year you have more chance as the defaults are older and have been settled longer. Go to a broker, not direct to a high street lender.
Channing says
Hi, I have had 2 defaults registered on my account, one is showing as the default date 10/03/14 and the other is 01/05/2015 – I have just paid them both off in full which totalled £170. I know they will take 6 years to fully drop off my credit file but realistically when can I apply for a mortgage. Starting to save this month for my deposit and want to know that when I go for one I won’t be declined.
Thanks
Sara (Debt Camel) says
A rule of thumb at the moment seems to be that some lenders are prepared to offer mortgages on good terms if your defaults are all over three years old AND have been repaid more than a year. So that would suggest May 2018. You will need to go through a broker not direct to a bank – the broker will hopefully have a good feel at that time for who is likely to approve you.
You need to keep an eagle eye on your credit rating, make sure any other debts are being paid on time, make sure you are paying more than the minimums to an credit cards and thatb your overdraft is reducing… And no credit applications at all in the six months before a mortgage application! Good luck!
Chris says
Hi I have a few missed payments from over 4 years ago, I have been up to date since and not missed a payment. My credit score is back to to excellent with Experian
I have a mortgage in principle with Barclays,
Would this stop me getting approved or is it worth talking to a broker?
Sara (Debt Camel) says
If you haven’t had any problems for 4 years and you never had any defaults, I would hope you will be OK from the credit record point of view.
Rach says
Hi. We’ve just recently been accepted for right to buy with 50% discount our mortgage will be £45000. My husband has a default which ends in Dec 2018. The default was for a catalogue for £355. Will this effect out chances of a mortgage. My husband has a really good income and I work too . We are going to use a broker but wanted some advise.
Sara (Debt Camel) says
Has he repaid this defaulted debt? When?
Rach says
No he’s not repayed it.
Sara (Debt Camel) says
He needs to repay it asap unless he is disputing that he owes the debt? If he has a great income why hasn’t he sorted this out before? Some mortgage lenders will be happy if a default is old (which this is) and it is repaid , but many prefer the debt to have been settled at last a year ago.
Rach says
He didn’t repay it as he didn’t realise it was on there untill recently when we had to get out credit report. He came out of work due to the recession and struggled every other debt at the time he paid in full as he was advised at the time not to worry about the catalogue as it was only a small amount. Silly to listen!
Bushra Zaheer says
Hi I have 3 defaults on my file from 2012, They were from payday loans totalling £1500, I can’t seem to even get hold off any of these companies to even pay off these debts. I have a deposit saved up for £30000 and I’m going for a house valued £135000, since then my account has been running really well, recently I’ve been approved for a credit card which I pay off on time. I have been told not to worry about the default as they are due to drop off next year but as they are still unsettled will I be approved for a mortgage still?
Sara (Debt Camel) says
which are the payday lenders?
SB says
Just checked Experian and I have no defaults… they have now all dropped off. (@ One stage I had 5!).
However, I do have 1 DELINQUENT account, where in attempt to clear off a few loans and credit cards, I wasn’t making complete full payment on the loan. I have now cleared the arrears. How does such an account look…when it comes to applying for a mortgage.
We have inherited / been gifted a deposit. No outstanding debts. But a Delinquent account showing on credit file
Sara (Debt Camel) says
How long ago did you clear the delinquent account?
SB says
Well unfortunately its still a live loan account. Just that its now up to date with payments. (i.e. the loan is no longer in arrears!)
Sara (Debt Camel) says
How long ago did you clear the arrears? How large is the balance, ie could you pay it off completely?
SB says
Just last month (March). The balance left is still large ish. Its £4k. However its the only debt we have.
No overdrafts, credit cards,etc. Just a loan @ £220/ month.
And looking at 85% LTV Mortgage.
Sophie says
Hello I have.no outstanding debt. But I have a default which has been paid of in full! It was for £800 it came on my report in September 2016. I am looking to get a mortgage with my partner in January 2018 both our wages come to £85000. How will this affect me.
Sara (Debt Camel) says
In January 2018 the default will only be 17 months old. You are going to find it very hard to get a mortgage at a reasonable rate of interest.
SB says
So Sara… how bad is a Delinquent account vs a Defaulted account?
Sara (Debt Camel) says
Experian give an indication of how they regard 1 late payment compared to a default here: https://debtcamel.co.uk/credit-score-change/.
But every mortgage lender has their own approach to this… sorry I know that isn’t very helpful. As a general rule lenders thing defaults are worse than delinquent, and they prefer the original problem to have been as long ago as possible and to the account to have been settled for as long as possible.
This is why my advice is to go through a broker unless your credit record is great. A broker will be able to look at your whole situation – not just your credit score but the details, your affordability, the size of your deposit, who your old debt problems were with and suggest who you should apply to or if it would be better to wait another year or two.
syed says
I got one default of £579 on 2nd FEB 2014 and pay them full on March 2017, Can i able to get mortgage?
Please advice
Sara (Debt Camel) says
Pretty unlikely for a while yet. This time next year when it has been repaid for more than a year you will have a better chance at getting a mortgage offer at a reasonable rate.
Firdausi Lawal says
I’m getting married in June and my husband wants s mortgage early next year. I have a delinquent loan, 3 payments, its over a year old and I’m almost done paying the arrears. I’ve had no further issues with any other accounts. If I clear my arrears in the next few months, will the bank consider me for a mortgage.
I now have a better paying job, we are looking for a mortgage of £85,000 and combined income of £57,000. He has good credit.
Sara (Debt Camel) says
What deposit will you have? Is some of this saved up now? What are the arrears still to pay?
Firdausi Lawal says
We have £5000 and we are trying to save up an additional £5000. The arrears is £639 on the loan.
Sara (Debt Camel) says
I think you should clear the arrears immediately using some of the saved money. You can then rebuild these savings over the next few months with the extra money you are currently planning to pay off the arrears with. See https://debtcamel.co.uk/save-house-deposit-pay-off-debt/ for more details.
The aim is to have your credit problems as far in the past as possible. Pay the arrears now and next May you will have been “clean” for a year.
You are borrowing a low amount compared to your salaries which is great. The mortgage should be pretty affordable for you I hope, you could even look at getting say a 20 year mortgage. It costs a bit more each month but starts clearing the mortgage mich sooner… in years to come this could prove a great decision for you.
Firdausi Lawal says
I’ll pay the arrears asap. Thanks
Pete says
Hi, i have 3 defaults 12/12/12 (£556), 12/12/12 (£1724), 01/06/13 (£103) all fully satisfied 31/05/14. How long will these stay on my credit file? From the default date or the satisfied date?
I have payday loan markers on my credit file. Last one was in 2015. Although i have had some removed and compensation thanks to your advise. I am still in the process of trying to get the rest removed.
What would the chances of me getting a sub prime mortgage? Would i stand a better chance with the governments help to buy? Thus increasing the size of deposit available. I did try around 18-24 months ago, had our AIP but in the end got turned down. I have no other debts and now very good with money.
Thank you Sara for your great informative site!
Sara (Debt Camel) says
The defaults will disappear 6 years from the default dates.
18-24 months ago, your defaults were less old, had been satisfied for less time and the payday loans were more recent. You could try applying for a mortgage now – go to a broker but I wouldn’t expect you to need a subprime mortgage.
Pete says
Thanks. I just assumed it would be subprime mortgage again, this is what we were told we required last time. But as you said i will speak to a broker.
And the payday loans wont be an issue?
Thanks for your help and advice
Sara (Debt Camel) says
Anecdotally most lenders don’t mind payday loans that were repaid on time if they are more than a year ago… but talk to your broker about this.
Anthony says
Hi,
I too am looking for a little advice if possible please. Following a split from my ex in 2014, for what ever reason, 2 of the bills did not get repaid. 1 was for Virgin Media which was in my name still, and the other was for a doorstep loan. The doorstep loan I had paid her weekly for since leaving, but I don’t think she had passed the payments on. I can see from my Noddle report that Lowell Finance took my Virgin Media account in May 2015 and it has been marked as default until April 2016, which is when I found out and paid it off. The doorstep loan was taken by Merligen Investments on Jul 2014 and was Marked as default until July 2016 (again, paid in full).
Looking at the advise given out previously, does this mean that potentially in a years time, when my 2015 default reaches 3 years old, I could approach a mortgage broker with a better chance please? All other bills, loans and cards have all been paid religiously, on time since I left in 2014. It was only my naivety with these other 2 accounts that has adversely effected my credit.
Thank you in advance
Anthony says
Sorry I mean to say, 1 default was for £191 and the other was for £260. I am not sure if this makes any difference.
Thank you
Sara (Debt Camel) says
Annoying how such small amounts of money can have such a big impact on your life :(
Sara (Debt Camel) says
That timescale sounds like a good plan.
In the meantime, obviously avoid any late payments at all, but basically work to reduce your debt as much as possible. Credit cards aim first to get down to less than 30% credit utilisation, then down to zero… use each month and set the card to repay in full is the best way to maximise your credit score and show a mortgage lender you have no money problems at all anymore.
Anthony says
Thank you very much for your reply Sara.
My overall debt is only £650 on a credit card with a limit of £2200, so I am just under the 30% limit. In your opinion, if I continued as I am now, do you think I would have a good chance of getting a mortgage in a years time if I approached a broker please? – I know circumstances are different, but I mean as a rule of thumb?
Thank you
Sara (Debt Camel) says
As a rule of thumb, and assuming you would pass the affordability checks and have an adequate deposit of course, it seems likely there will be some lenders who will offer you a mortgage at a reasonable rate.
Anthony says
That is brilliant Sarah, thank you for your advice! I would pass the checks and have the deposit.
I appreciate your swift replies!
Mel says
Hi, I need some advice me and my partner are looking to get a mortgage within the next year but my partner has 3 defaults on his record PRA GROUP 19/06/13, T-Mobile 10/12/15 and Lowell Portfolio 06,06,2012. The defaults were all no more than £200 and have all been settled. We have a 5% deposit at the moment but are looking to get 10%. What are our chances?
Two of the defaults were settled a few years ago and one of them 6 months ago.
Thank you!
Sara (Debt Camel) says
You will struggle until the most recent default has been settled for at least a year. And at that point, 10% deposit will make it much easier.
Gemma Bradwell says
Hello I am hoping to get some advise, me and my husband have just applied for a mortgage with Aldermore after being advised to go with them because of adverse credit. We passed the initial check and are meeting with our broker on Wednesday to put in a full application. However, I am now starting to panic that it is all a waste of time and probably money. I no longer have any defaults as they were 6 years old in May this year so have now been wiped however my husband one for £190 for O2, which for the past 6 months we have been trying to pay off but O2 kept denying any knowledge of the default, until we got advise to threaten them with the ombudsman which we did last month and surprise surprise they found the account and we paid it off in full however it will still show on my husbands account until August 2018. I have got late payments but only 1 in the last 6 months, however did have 1 that was over 6months late from last year. However all cards have been paid off in full and I have paid my student over draft off to so the only debt we have between us is a credit card with a limit of £450 which is not at its maximum and I pay £150 off each month when needed. The other thing that is a major concern is that my husband started a new job on April 10th so has not been in same employment for more than 3 months however he has a full time contract and is employed by the County Council and has been told if needs be he can have a letter to support this. His new job is the same skill as he was a chef before and chef again now, which on Aldermore criteria states: ‘The applicants must be able to demonstrate a minimum of three months record of employment immediately preceding the
mortgage application in the same line of work’ am I right in thinking that he should be ok given that he hasn’t had any gaps of work and has been in the same line of employment? I know they will also look at our bank statements and we are living with parents so really we have been saving to pay off my overdraft and then have recently paid to have both of our cars repaired and have not got much savings in our account which I am worried they will question how we could afford to live in the house given that we spend our monthly incomes, although when we rented for the past 5 years all of our bills and rent were paid on time we just have been enjoying our wages stupidly. I look forward to your reply and any advise you can give us. Gemma.
Sara (Debt Camel) says
It’s pretty hard for me to guess where a bad credit lender will draw the line. I will say that you should very carefully at the interest rate you are quoted and just walk away if it is too much. Six months (or even better a year) with no late payments at all, with savings building each month and with your husband’s employment history becoming longer would be a LOT better.
Rach says
Hi, we’ve been offered a morgage and the solicitors are now involved the searches have been done and now waiting for other stuff to finalise before completion. I’ve noticed on my credit score I have an agreed payment plan that I took out with United utility’s not thinking it would go onto my credit report i just wantec to stop it goikg further like default ect but it showing on there? Will they run another credit check at the end? I’m worried as I don’t know if this will make them pull out last minute. Thank you
Stew D says
My partner and I applied for a joint mortgage a couple of months ago and were declined due to a default on my credit score. My girlfriend was told she could apply, so we did and were accepted in principle. We havent signed any paperwork yet as we were waiting for a Letter of Comfort from the council due to the current owners doing some works to the house without planning permission. My girlfriend has today noticed a default appear on her account which has been settled.
How will this affect our mortgage thast we have in principal? Is there anything we can do to keep the sale and mortgage?
Sara (Debt Camel) says
Why has this default just appeared? Does she think there should have been default? Is the default date accurate?
Leanne says
Good evening,
Looking for some advice really. My partner & I are looking to get a mortgage, however, I have 3 defaults on my file. All from 2013 when my ex husband left & I was made redundant. I actually thought they’d been settled along with other debts, but somehow they’ve been missed – probably due to moving a lot. I am now arranging to pay these off, however, with moving etc my credit rating isn’t very good, but my partners’ is.
I’m just wondering if it would be best for him to apply in his sole name rather then jointly? He has no credit cards, earns £41k per annum. He has a car on lease he pays £169pm & we have £20’000 deposit. We were hoping to buy a new build on help to buy. Do you think this would be best?
Any help would be grateful appreciated.
Thank you
Sara (Debt Camel) says
Can he afford the mortgage using his income only?
Leanne says
Yes, he could afford the mortgage using his income only.
Sara (Debt Camel) says
Talk to a mortgage broker about that as a way forward. You can always remortgage into both names after your first fixed rate ends.
Jeff says
I’m going for a mortgage Friday. A bit nervous tho. It’s with a high street bank, I’ve been in already, had a mortgage in principal etc done a soft search, mortgage adviser said looks good can’t see any problems. I’ve had really bad credit in past, but over past 2/3 yeas been building it back up, haven’t missed a payment on any loans/credit cards/bills. About a year ago I had 2 letters from Lowell through the door, didn’t even realise I still had any debt left as I’d paid it. These accounts were 100% not on my credit report as I check it weekly and that’s why I was surprised I had these letters. So I paid them any way, small amounts £28 and £56. What has really annoyed me is after I paid them THEY PUT THEM ON THE REPORT, can they do this???? I’ve got a 10% deposit on a £100,000 house. My affordability isn’t an issue, just worried about the defaulted accounts, all paid and settled, and both over 4 years since default.
Sara (Debt Camel) says
Well 4 years since the default and settled a year ago and you may well be fine. If not talk to a broker.
Jeff says
Sort of good news. Went in today, affordability not a problem. Went through applied for mortgage, been referred to the underwriters. Mortgage adviser is confident it will go through but obviously can’t give me a guarantee. I knew the default would be a stumbling block but they are 4+ years old, so I was half expecting it to be passed over. At least it didn’t get declined!!
Sara (Debt Camel) says
ok, fingers crossed… let us know how you get on!
Jeff says
Great news. Had confirmation that my mortgage application has been agreed.
I’m chuffed. Just goes to show the credit score isn’t everything. My credit file wasn’t great either, but the last 4 years I’ve paid everything on time. They obviously looked past the mistakes I’ve made long time ago.
Lou says
Hi, my partner and I have recently got the deposit together for a house. We are looking at houses between 300,000 and 350,000 with a 10% deposit. We have cleared affordability assessments however I am concerned about some items on my credit file. I have a default from December 2011 that was settled in 2014. I also have 2 pay day loans from 2014 and one from 2015. Is this likely to cause us any problems ?
Sara (Debt Camel) says
Many lenders will be fine with an old default that has been settled for years. And payday loans normally only matter in the last year. So I hope you will be OK – if not, talk to a broker, because there should be a lender who will give you a mortgage at an OK rate.
Lou says
We have got a decision in principal from Nationwide after a hard credit search and providing them with payslips ect. We have got a meeting with them on Monday to complete the full application. Despite the hard credit search being okay, could the old items on my credit fill still cause this to fall through ?
Sara (Debt Camel) says
Yes it’s possible, but Nationwide have a good reputation for being thorough at the DiP point so hopefully you won’t hav a problem. Come back and say how it goes!
Lou says
Mortgage offer sent through last week, very happy. Thank you for all of your responses
Andrew says
Hi I have just found out that o2 added a default for £139 to my account back in April 2015. This came about because I paid off a mobile phone contract early and had a new phone off them which I had to return within a week because it was faulty. I cancelled all contract under buyer rights and found another separate contract through a 3rd party which was also with o2. I have always used the same account to set up my phone bills and monies are shown through out the year paying o2 regularly, including the one off payment to them in the Feb 2015. Unbeknown to me, o2 accounts had paid money into a joint account and then taken money out of this account, leaving behind £139. This was never picked up. Throughout 2015 I called o2 and emailed no less than 20 times, each time specifying I wanted to know why I owed £139 and where the money trail was prior to me paying anything else to them (as I had already paid them £124). I was even told by someone in o2 accounts that there was a ‘glitch in their system’. However, it wasn’t until Jan 2016 when we found what had happened and I paid the £139 immediately. I am now trying to get a mortgage and want to know if I am going to struggle, as my equifax account states perfect credit rating but Experian highlights this discrepancy put on by o2, which was their error in the first place. I am in the process of dealing with o2 credit file referral team, but havent heard positive things about them.
Sara (Debt Camel) says
Yes you are likely to struggle to get a mortgage until this default is removed. It is a shame you didn’t check your credit record back in 2016 after paying the money owed.
From what you have said, there seems to be a good case for O2 deleting the default, as you were trying to sort the problem out and they weren’t helping.
Andrew says
Just to give you an update, I complained to head of customer services, Mark Gait, and since this time things have moved far more quickly. I have now had my default quashed and taken off my credit file and am back to being unblemished again. For those reading, don’t take the first knock back they send as it’s a machine and it doesn’t care about you. Good luck!
Mark says
Hi,
this site is awesome, very informative, hope you can help with my own situ.
I’ve been terrible with money most of my life, including lots of gambling, now getting myself straightened out and just wondering about timescales:
I have Salary around £50k
no debts in my name but late payments on three phone accounts until April 2017
payday loan use from 4 years ago, all settled on time
1 £2,700 default from July 16, fully settled July 17
Until July 17 I also had a credit card and large overdraft that were maxed out but these have been settled and closed/removed
My wife earns £14k and owns a house worth £120k with £20k equity, debts of £9k in her name which are £5.5k personal loan and £3.5k cc (0% finance)
we have three young children in a two bed house so need to move asap
am I looking at 1 year then possibly, with higher interest rate?
as I’ve never had mortgage in my name, could i qualify for a first time buyer deal, even if we had to sell my wifes house to get the deposit?
debts will be repaid in 12-14 months time
if you can help that would be awesome!
Sara (Debt Camel) says
Well done on stopping gambling. Staying “clean” for the next year is the most important thing you can do.
With a default only just repaid, yes you are looking at at a year from now.
Not clear if you still have a credit card? If you don’t, you need to get one (even if it is at a horrible rate) and use it for something small (a tank of petrol say)and repay it every month in full – this is the best thing to help your credit score start to improve. When you wife clears the 0% credit card, don’t close it, again use it every month and repay in full.
Apart from that, no more credit, including car finance, for either of you.
1st time buyer deals change over time. I’m reluctant to guess what they may be in a year. Often they are tied to new build, which makes them much less good value than they seem as a new build generally drops in value as soon as you have bought it. You may be better going for an older 23 bed house which could be extended? And you will definitely need to sell wife’s home, she doesn’t have nearly enough equity to be able to keep it as a buy to let.
Mark says
many thanks for the reply – again a great website, very useful and in language I understand! thanks again
Nonny findlay says
Hi
Me and my husband are saving to buy a house in 2019. I looked through my credit and realised I have 4 closed defaults last one being in Jan 2015 and 2 open defaults last default date being 2014. My husband has a ccj on his account which is now settled date being august 2014 and has a default 2016. Do u think we will be ok to go for mortgage in 2019 we have moved back with parents to save the deposit money nd make payments on time every month. Any help will be great
Sara (Debt Camel) says
ALL your defaults and CCJs need to have been settled at least 12 months before you apply for a mortgage.
Even when that has been done, you are still going to struggle because of your husband’s CCJ. You are going to need a deposit of at least 10%. You will find this much easier after the CCJ drops off your husband’s record, 6 years after its start date – I’m not sure if August 14 is the start date for the CCJ or the date he settled it?
Dan says
Hi,
I have a default, July 2016, fully satisfied in July 2017, I am disputing it under affordability criteria but assuming I lose on that front then with £10k of debt still left and only £20k equity in house, should we
Repay all debt as quickly as possible
Pay ‘less’ off of debt and overpay mortgage
Pay ‘less’ off of debt and pay into a House Buyers ISA
Pay ‘less’ off of debt and leave any surplus in current accounts (to be used for deposit/ moving costs)
— the debt is split across a PL (6.9%) and a CC (0% until October 2018)
any advice would be most welcome
Sara (Debt Camel) says
If you want to move or remortgage where you are, your top priority is clearing the defaulted debt.
Help to Buy ISAs are only for first-time buyers, so they don’t sound relevant for you.
Dan says
sorry, that wasn’t very clear, the default is fully satisfied (July 2017)
the house is in my wifes name and Ive never had a mortgage so might qualify for a HTB ISA?
Sara (Debt Camel) says
Well you probably won’t be able to get a mortgage before July 2019, 3 years after the default date … is that the sort of timescale you are looking for? If it is, then by then your personal loan will be a lot lower and also the CC balance.
There is no downside to saving money in a HTB ISA – if you need it for the fees etc rather than the deposit you can just take it out and not get the bonus.
Dan says
Hi Sara, thanks for reply, I’m really hoping I can get a mortgage in July 2018, two years after default, one year after it was fully satisfied, is that a non starter?
Sara (Debt Camel) says
It’s pretty unlikely. Unless you have a very large deposit. Or get a “bad credit” mortgage – which I really don’t recommend as you may NOT be able to remortgage back to a “normal” interest rate after a couple of years, whatever the broker tells you at the moment.
James says
Hi looking for your advice.
I’m looking to purchase my 1st home next year.
Got 10000 deposit as inheritance money.
I have 500 credit card which will be nearly clear by next year. Also I’ll have 1 year left of my car finance.
I have a default with RBS from 2012 which hasn’t been updated since 2013 on my credit file. It was a mistake by bank and I refused to pay. It was back and forth then they just stopped chasing it and it’s not been updated on the credit file.
The other default which will be cleared by December this year is for llowel.
I’m wondering how likely I will be approved next year.
Sara (Debt Camel) says
You won’t be able to get a mortgage if you have unpaid defaults showing on your credit record.
If there is a default date from 2012, then this will disappear from your records sometime next year – keep an eye on your credit record and your post though – if it is sold to a debt collector they may go for a CCJ which would ruin your chance of a mortgage.
“The other default which will be cleared by December this year is for lowell.” Do you mean it will be repaid by December? or that it has already been paid? Or that its default date is December 2011?
James says
I meant it will be repaid in full by December this year. The default date on this is 2015 and the balance was 602. Now 400
Sara (Debt Camel) says
You will probably have to wait for 12 months after this debt has been repaid. By then the default will be over 3 years ago and you will have had a year free of any problems – that is what a lot of lenders look for. Make sure you go through a broker, not direct to a lender.
James says
Thanks for your help.
Nonny says
Hi
I have defaults on my credit file which drop off in 2019 and 2020, were going to pay them off this year we’re thinking of going for mortgage late 2019, I’m thinking of making a partial payment on the outstanding defaults, is that going to be a problem in future when I look to get a mortgage?
Sara (Debt Camel) says
This article https://debtcamel.co.uk/dmp-partial-settlement/ looks at the topic of partial settlements and getting a mortgage.
Mongoman says
Hi
I’m in the process of buying a 153000 3 bedroom and selling a 120000 2 bedroom offers accepted on both , so I’m just waiting to do an actual application had a MIP from Santander and one rejected by nationwide . I’ve got 18000 in credit but this will be reduced by 9 k in a few days including profit on our sale we will have a deposit of 80 k but my worry is my ignorance of the effect of payday loans will scupper all plans I’ve had over 10 in the last though I’ve made one late payment of £12 in the last 6 years with no other negative factors on my file . My wife got made redundant last week so it’ll be my own application on a 36 k salary , so will the big deposit offset the payday loans at least with a less strict lender ?
Thank
Sara (Debt Camel) says
When was the last of your payday loans?
Mongoman says
6 weeks ago
Mongoman says
Answer is yes ! ?
Daniel says
Hello Sara,
I had a joint mortgage valued at £149k. There was a default on this in March 2016. The house was sold in April 2016 and the mortgage paid off in full – when I look at my credit report, it says “settled” against that debt.
It is now 17 months later and I wish to apply for a sole mortgage, I have £12,000 deposit & wish to purchase a house for £120,000.
Would I be better to wait or go to a Mortgage broker now? What is your advice…..on whether I will find someone to give me a mortgage?
I have no other debt…
Sara (Debt Camel) says
You may as well talk to a mortgage broker. It’s soon after the default, but as you had presumably separated from your partner and the house was in the process of being sold, the mortgage broker may consider an application now could work.
Daniel says
Hi Sara,
Thanks for your response. Would your advice be to leave it until 3 years have lapsed from the default/settled date and then try by talking to a Mortgage Broker?
Best Regards,
Daniel
Jeff says
Hi, searches came back few weeks ago, had contact with solicitor he had a few questions for their solicitor regarding sale, as soon as they were answered they said they shall contact me to make an appointment for the paperwork. Obviously the questions were resolved.
The seller had an appointment with her solicitor to sign paperwork her side today.
My question is what paperwork would that be, and what timeframe do You think until completed.??
Sara (Debt Camel) says
Hi Jeff, there isn’t much point in me guessing, ask your solicitor. They should be able to say was is being signed and likely timescales from here in.
lee says
Good afternoon I am looking at advice please,
me and my partner are looking to buy in one years time. I have had about 6 defaults latest was jan 2015 and all have been settled the last been last week. I now have £0 debt. my partner has a very good credit file no late payments/defaults ect and only has 1 year remaining on car finance.
my income is £51000 and hers is £14000. the house price we are looking at is approx. £150000 and we will have a deposit of 15-20%.
I know our best option is a broker, I was wondering if you think we will stand much chance with a main provider or an adverse credit lender or non at all?
Sara (Debt Camel) says
On what you have said, i would expect you will be able to get a mainstream mortgage at a reasonable rate in a year’s time. Good luck!
lee says
thanks for the reply.
John says
Hello
I have a single default which is 22 months old now. I settled the default (mobile phone) just over 1 year ago, it was for £170.
I am trying to obtain a mortgage and putting down a 15% deposit. My income is 40k and the loan I require is 140k.
What chances have I?
Thanks
Sara (Debt Camel) says
It’s outside the “default more than three years old” rule of thumb, but it is small AND you have a good deposit, so it’s worth talking to a broker now and asking their advice.
Jeff says
Very good chance, I had 2defaults very similar to yours, few late payments, Wonga loans. went for a mortgage with natwest about 3 months ago, 10% deposit, the house is now mine ?
Suzy says
Hi Sara
Heres my situation,
Want to get a mortgage to move home next summer, Downsizing
1 default old credit card partially settled in April 2017 , default date July 2015
What do you think my chances are ???
Sara (Debt Camel) says
Are you actually reducing your mortgage? If you are it’s worth a try, even with the mortgage problems showing and that default. But definitely, go through a broker.
Suzy says
Hi Sara
Thanks for your advice, Yes im reducing from 123k mortgage also by then the mortgage would of been 2 years also up to date
Hoping to reduce my mortgage to around 60k
Sara (Debt Camel) says
That is a big reduction – I hope a broker will be able to find you a lender who can get you an OK deal.
Suzy says
Hi Sara
I have now approached a broker as you suggested and told just 1 lender will /May consider DIP , broker asking lots of questions to get the DIP also asked if i have been known by any of names/changed my name ?
Why do you think this is ? the broker have my credit file, Mortgage up to date for 18 Months, 3 defaults , 2 paid up 1 to be paid up if i get mortgage, defaults are from 2012 off next march 2018 other 2 from 2015,
At least 1 lender prepared to consider me , i already have a mortgage but need downsize to a much smaller one for at least half the amount ..Any advice ?
Sara (Debt Camel) says
Asking about a change of name is routine – it doesn’t mean they think there is anything suspicious. This should be reflected on your credit record but isn’t always. As always, give a completely full and honest answer to a broker – they can’t help you if there is something you aren’t telling them!
Sean says
Hi Sara,
Looking for a little bit of advise please?
My wife and I are looking to buy first time in 12-18 months time. Unfortunately I have a 6 defaults on my account, all now fully paid ( 3 are 3 years old and 3 are 4 years old). I also have a number of PDL accounts, never defaulted all paid in full and on time the last one being 12 months ago. Given the circumstances, unsure where we stand so your advice would be appreciated :)
Thanks
Sean
PS -We will have a 15-20% deposit house value £180K
Sara (Debt Camel) says
if you loan meets the usual affordability checks, then you should probably be Ok if you go through a broker. Make sure both your credit records say clean from here on.
Kim says
Hi Sara,
I’m 32 single, earn 34k annual salary and would like to apply for the right to buy my flat. I have bad credit rating with Noddle and a score of 391 with clear score. I have a CCJ due to be removed January 2018 and another CCJ to be removed January 2019. I have 3 credit cards, all under limit and payment above minimum. All accounts are paid on time and up to date. Do I have a chance at getting a mortgage? I am hoping to apply around April 2018.
Thank you in advance.
Sara (Debt Camel) says
Losing 1 CCJ will help your credit score but some lenders still won’t consider you. I hope the second CCJ has been settled? You haven’t said how much you owe the credit cards and how large a mortgage you want.
Kim says
The second CCJ was for £245 and discharged April 2015. I have £6100 available credit and credit card balances total £2,700. The mortgage would be for roughly 30k as I am hoping to use RTB 50% discount as the deposit.
Sara (Debt Camel) says
So your mortgage is going to be less than your annual salary – I would hope in that case you shouldn’t have a problem.
Kim says
Thank you Sara.
Lee says
Hi
Me and my wife made ourselves bankrupt in June 2013. Pretty much all our accounts are now settled or partially settled.
There are still two however that are defaulting on my wife’s credit report and one on mine but these were included in the bankruptcy. It just seems the creditors haven’t bothered to update them.
We also have a couple of accounts that weren’t settled until late 2015 even though we were discharged in 2014.
What do you think of our chances of getting a mortgage in a few months time given the bankruptcy wont be off our credit reports until 2019?
We don’t really have more than 2k deposit and we earn around 50k between us. we have two kids under 9 and are looking for a house around 220-250k. Thanks
Sara (Debt Camel) says
Here are the details about how to get those debts updated https://debtcamel.co.uk/credit-file-after-bankruptcy/.
But with bankruptcy on your credit record you have little chance of a mortgage and none at all without a proper deposit.
Scottie says
Hi
I have defaults from 2012-2014 as a result of marriage breakdown. All have been satisfied between dec 15 and may 16 and 3 are due to drop of my report by July 18. What are my chances of getting a mortgage? I have 15k saved for a deposit and have just opened a help to buy isa with santander
Sara (Debt Camel) says
It sounds as though you have a good chance after those defaults are gone!
Scott says
Hi Sara
I will still have defaults on my record until 2020. My equifax report shows I haven’t had a late payment or missed in 34 months yet my score is still very poor
Sara (Debt Camel) says
Your credit record won’t improve until the defaults go I am afraid. Are these defaults repaid? Do you want to get a mortgage?
Scott says
Yes all the defaults are repaid in full. I’m hoping to get a mortgage around August next year and as I live in Northern Ireland non of the sub primes seem to cover here. I have 15k saved for the deposit but hope to have another 3 or 4 by August
PHIL says
Hi,
I had a default back in Feb 2014 which will be 4 years old in Feb 2018 and it has been repaid for over 2 years. My credit score is fair on experian and excellent with Equifax.
I have no debts expect £70 on a credit card and have no car finance or any other loans.
I’m looking at buying a new build property in the middle of 2018, do you think i will have any issues obtaining a mortgage?
Thanks
Phil
Sara (Debt Camel) says
There will be lenders who won’t mind that default. Make sure you go through a broker, not direct to a high street lender though.
Amy says
Hi Sara,
Me and my husband are looking at getting a morgage in the new year in the first few months.
We got into debt years ago. We used our wedding gift from my mum and Dad (15k) to clear our debts and was left with 10k for a deposit.
We cleared our debts nearly 18m ago and were wondering what our chances are of getting a morgage?
We have had no defaults since, husband has had a credit card which we have paid monthly and is now clear and I have a store card I use and pay in full monthly, only using around 20% off the limit at a time.
My husbands wage is £26000 pa and due a promotion next month to around £32000pa my wage is £6240 pa
Thank you and merry Christmas!! ????????
Sara (Debt Camel) says
So all the defaults showing are over three, years old and have been settled for more than 18 months. And you are both using a credit card but not carrying a balance on it. That all sounds good – nice promotion your husband is getting too! DO go through a broker, not direct to a high street bank, though as a broker will have the best idea of who to apply to.
Amy says
Yes, the last ones we have defaulted in 2012, 2013, 2014 and are settled as of June 2016.
I settled one a few months ago as I noticed I had a ccj on my report, I paid it straight away and the ccj has been lifted due to it being under 28 days of being filed ????
All credit cards are clear etc. I only have the phone loan now which is on-going and I never miss payments.
We are making an appointment with a morgage advisor in the new year to discuss how we will do getting a morgage.
I have had an agreement in principle by Natwest (my bank) I thought it may be an indication on our present situation credit wise as they do a soft search, not too sure if that’s something to be happy about or whether it isn’t really!
Amy says
Husband has just informed me that there is 2 of his that is cleared but defaulted 2015 & 2016
That may change things a bit
Amy says
The 2016 is January so next month will be 2 years
Becky says
My husband and I are looking into buying a bigger property. We currently own a flat which we have done since 2013. I am not on the mortgage as at the time had very bad credit due to poor teenage decisions. I at one time had 10 payday loans running. We both are high earners with long employment history. My husband has an excellent credit rating and no outstanding debt. The only thing we have is 2 car finance plans in his name & a credit card with a 10k limit which we only use unless booking flights. I have not taken out any debt since 2013.The problem is my credit rating. On Experian I have a 999 score, clearscore & Noddle my rating is terrible. This is due to 4 defaults, 3 from lending stream dated 27/01/2012 all under £200 & 1 from Minicredit debt collector totally £376.00 which I am disputing – dated October 2014 This has been sent onto FO.
What are our chances getting a mortgage with these 4 defaults, no debt & a 10% deposit. We could maybe push to 15% if needed. Would it be better if I paid the default amounts to lending stream? I have recently sent them an affordability complaint. I haven’t paid them as I literally had tried to arrange plans with these two companies and just gave up. I really don’t know where to go from here. To be truthful my husband doesn’t know about any of the payday loans, I paid them back and sorted everything out myself. Need advice badly!
Sara (Debt Camel) says
It’s not the defaults that are the problem for a mortgage so much as the fact that they haven’t been paid… Unfortunately just paying them now isn’t going to help as mortgage lenders will usually want the debts to have been paid for at least a year.
The 3 lending stream defaulted debts – are they still with lending Stream or have they been sold to a debt collector? the defaults themselves will all disappear in 27 January 2018… the only danger with these is that LS or a debt collector decide to take you to court for a CCJ in the next month. That is pretty unlikely unless you have been getting warning letters. As you have already started a complaint with lending Stream that shouldn’t happen! If it does, worst case is that you have to settle the debts, but there is no reason to do that now. Basically these should be OK some the end of January.
The Minicredit debt – when did you take the loan out? My guess is that the default date on that is just wrong, so you should try to get it corrected to being back in 2011 or early 2012, then it too will disappear like the LS ones.
BUT you do need to tell your husband about this mess. It will be very stressful trying to hide them and you are going to have to go to a mortgage broker, not direct to a lender, and you will have to tell the mortgage broker everything as well.
Becky says
Just checked my Noddle report and it’s 27/01/2013 for the default dates on the lending stream loans. These are for £116,£119 and can you believe £48. Seems so little! I cannot believe I let myself get into such a state with payday loans. These defaults are with lending stream still yes. I sent a complaint but never heard anything so I may as well send that off to the FO tomorrow.
The minicredit default date seems to run true with the last payment I made to them. They trapped me in a£20 a month repayment plan which added hundreds of pounds to the loan I got from them. I paid £20 a month for 9 months then I phoned them to settle and found out I still owed hundreds of pounds even though the loan was £220. I took this out in 2013 after rolling it over for over a year! In total I think I paid them 5k in interest.
I know you’re right about the telling my husband, it’s like I’ve betrayed him in a way. I wish I had come clean years ago.
Do you think we are better waiting until next January then if that’s when the ls defaults will drop off?
Becky says
Sorry forgot to add that the FO picked up my opos complaint last month. I’ve read online that the default amount might change with the complaint but that’s about it. I’m guessing I’ll owe £40 or something. Also I took the loan out in 2013 but I took it out straight after I paid the previous one off after rolling that over for months. I also was declined a few times by them too. It’s been a mess really. I sent a complaint onto FO about mini credit and it got picked up and they told me there’s no point in complaining as I wouldn’t get any compensation as it went into liquidiation. I wasn’t wanting compensation, I just wanted the amount I owed to be corrected so I send another complaint about the collection agency.
Feels like it will never end. Payday loans have ruined my life for the last 10 years. It’s like an actual jail sentence!
Sara (Debt Camel) says
I think you are doing the right thing sending the LS and minicreit cases to the FOS. But tell your husband now so he knows what you are trying to do to put things right.
Haz says
Hi Sara,
I am looking to buy my first property, i am 32 and earn £50k. i have one default from june 2012 which was settled in 2016. the default will be removed in june 2018. is this going to be an issue while getting a mortgage?i have zero debts. I want to apply through help to buy London scheme. i have £25k deposit. the mortgage would be £225k . Many Thanks
Sara (Debt Camel) says
It should probably be OK as the default has been settled more than a year ago. I always suggest talking to a broker, not going directly to a lender though.
Hayley says
Hi,
Wondering if you can advise my partner and I are looking to buy a property together but he has 5 x defaults on his credit history from 2014 totally roughly £6k they are all now satisfied the latest one being satisfied in Apr 2015. We have a 20% deposit to put down and have a combined income of £90k looking to borrow about £300k we are scared to do an application incase it damages his credit rating anymore mine is fine. Since this he did take a loan in Oct 2016 with a high street bank whom gave a slightly higher interest rate, but has had no problems paying it. However when looking at his credit rating it still shows somewhere between poor and fair. What are our chances?
Sara (Debt Camel) says
On the figures you have given, I would hope you will not have a problem getting a mortgage at a reasonable rate of interest. But go through a broker, not direct to a high street lender.
Hayley says
Thank you for you reply, that’s what I thought might be the case.
Sesay says
Hi Sara, my husband and I are looking for a mortgage and both have defaults, mine was registered over 3 years now, satisfied within 4 months of registration, my husband’s registered almost 6 yrs ago and he disputed it with T-Mobile it has not been paid.
Our total income is £67000.
We are looking at a new build costing £350000 and to put 10% deposit and with the htb equity loan and getting 70% mortgage. Skipton have given us an AIP through a broker after credit checking but I am worried that when it comes to full application we will get declined. Our credit scores are very low, Do you think we have a chance?
Sara (Debt Camel) says
It depends on what Skipton’s underwriters think. If they were aware of your credit record problems, you may be OK. But it’s hard with an unpaid default.
mark says
Hi Sara
My wife and I are just applying for a mortgage through a broker, we have £12.000 to use as a deposit for a £110,000 house.
broker was happy with the affordability between us.
My credit history isn’t brilliant I have a default on there from 2014 of which I wasn’t aware of for £265 which I have now paid in full and a delinquent account of £118 for an old current account, ive spoken to Barclays to try repay this but I have no details of the sort codes or account numbers so I am struggling at the minute but will get there in the end. the broker didn’t seem overly concerned he said worst case it might be a sub prime mortgage for two years.
what do you think?
Sara (Debt Camel) says
I think it’s very easy for a broker to say that, but it’s you that has to live with a subprime mortgage. The problem is that there is NO guarantee that you will be able to remortgage with a “normal” lender in 2 years time. Who knows what the mortgage situation will be then, post brexit? Who knows what your own finances will be then? The worst case is you are trapped in the subprime mortgage and its interest rate goes up. even if other interest rates are falling.
Rach says
Hi, I wonder if you can give me an indication on the likelihood of getting a mortgage.
My parents have offered to gift me £10,000 for a deposit but I have £2800
on £4000 credit card.
I am paying this of as quick as poss. Plus I have a student loan of £6000 which is deferred as I don’t earn enough to pay back. Finally just discovered a default from 11/16 for £44 for O2. Have wrote to them offering to pay it off if they remove the default. What do you think my chances might be?
Sara (Debt Camel) says
How important your credit card debt is depends on your mortgage affordability calculation – if your student loan repayments are deferred your salary must be quite low. You will find it much harder to get a mortgage unless you can get the O2 default deleted – you need to come up with a good reason why it should not have been added, not volunteer to pay it, that isn’t likely to work.
Rach says
Quick update with 02 default £43 11/16 just had notification that they are going to remove the default ???? and my mortgage broker has found me a good deal on a mortgage of £105,000 despite my low income. Keep at it folks it can be done.
Sara (Debt Camel) says
well done & I hope everything goes smoothly for you
Rach says
Thanks for your reply, I stated in the letter to 02 that I had been told that there was nothing else to pay and had been misled into thinking that everything was paid up and thought they had made a mistake. As I hadn’t heard anything since and I wrongly assumed that they had corrected this. I hope that they will see that this was a genuine mistake. I’ve had 2 contracts with them and only had this default on the final payment of the 2nd contract. I really hope they will be sympathetic. If they are not do you think my only option is to wait until the default is 2 years old? Or is there anyway around this?
Sara (Debt Camel) says
OK, you need to make it clear that you dispute that a default should ever have been added and you want it deleted – you are NOT offering to repay the amount if they agree delete the default.
P D says
Hi Sara,
My credit file has a default for £46 from Three Mobile. This is almost 5 years old but is unsettled as I am now in dispute with them about it.
I have been advised by a broker that Halifax (and others) may still consider me for a mainstream mortgage, but what’s your view on this given that the default isn’t settled?
I’m assuming even if we settle it now, that it needs to be settled for over 12 months to be disregarded?
Many thanks
Sara (Debt Camel) says
It is possible that a mortgage lender will apply some common sense to a very small and very old default. Sorry but your broker should have better information about specific lenders than I have,
B Ama says
Hello
I was wondering if you could please offer your opinion before we approach a broker.
I have a default from a Halifax current account that will be 5 years old in may and paid off for 1 year in May also. The other credit I have is for a catalogue and a Capital One CC, both have a zero balance and I have no other defaults, late payments etc.
My partner has a good credit score and we are looking to get a mortgage in June, approx 100k deposit.
Will I get accepted on the mortgage or should my partner apply alone?
Thank you
Sara (Debt Camel) says
If that is the only default I would expect you two to be able to get a reasonable mortgage offer. Start by talking to a broker, don’t apply directly to a lender or be made to use the broker the estate agent selling the house recommends.
Steven haan says
Hi there.
Looking to get a mortgage on a property £180-£200k. Earn 30k pa & 20k guaranteed overtime. Have £20k deposit. Have 2 defaults on my credit file, first registered in October 2012 for 18k fully settled in Aug 2017. 2nd registered in October 2015for £500 settled feb 2016.
Just wondering what rates etc I’d pay and if deposit amount is enough? First default will be 6 years old and dropping off file in October 2018 and 2nd default will be 3 years old in October 2018. Should I wait til then for a better deal?
Thanks
Sara (Debt Camel) says
By Oct your credit record will be looking much better and yiu will have a 10% mortgage – that would be a good time to talk to a mortgage broker.
Dan says
Hi my partner and I want to get a mortgage but she had a default show up on her credit check from dufualt date 2013, we paid it off a week ago but how long will this show on the credit report for? This minor mistake from her younger years is taking a big hit on us getting a mortgage
Thanks
Sara (Debt Camel) says
For 6 years from the default date so sometime in 2019.
Jeff says
I’ve commented on this thread before. I had 2 defaults from 2013/14 plus some late payments on 1/2 accounts, all paid, I only settled one last feb too as I didn’t even know it exsisted. I had a mortgage through natwest at an awesome rate, no problems at all. Not always doom and gloom
Sara (Debt Camel) says
Agreed.
Jeff says
Also like to point out my credit score was Very poor. At the time I was accepted it was around 530ish, the last 2/3 years I hadn’t missed a payment on anything, up to date with everything, and also explained my circumstances to as why I had defaults and missed payments in the past.
Suzy says
Hi Jeff
Well done great news like you my credit not great but up to date in last 2/3 years , Can i ask did you get your Nat West mortgage via a broker or direct ?
Sara (Debt Camel) says
Anyone who doesnt have a perfect credit score should ALWAYS go via a broker.
Jeff says
I went straight to natwest, with a view if I got declined I would go see a broker. It did get referred to the underwriter as you would expect but still, I really didn’t think I’d get it I was chuffed when I had the news. I also had 10% deposit.
angela says
hi, myself and husband got a mortgage in principle and then did the application using the soft search, we thought we were home and dry- but they have said they want at least 15% deposit, we only have 10% , husband has 2 settled defaults for small amounts from 8 months ago and 2 from 2 years ago.however both our credit ratings are excellent… is there any likelyhood that if we apply again after 12 months from the last default settlement that we maybe excepted for a mortgage with less than 15% deposit?we want a mortgage of 130000, we have 13000, we earn 45000 annually and have no debts. huge thanks xx
Sara (Debt Camel) says
“husband has 2 settled defaults for small amounts from 8 months ago and 2 from 2 years ago” are the two from two years ago settled?
angela says
hi, yes all settled
Sara (Debt Camel) says
OK, so against a typical rule of thumb that defaults need to be more than three years old and have been settled for more than a year for many lenders, your lender doesn’t mind if you have a larger deposit.
I think it is worth trying after 12 months from the last settlement – but make sure you go to a broker this time, not directly to a lender, you could be lucky and pick one who is happy but it’s like throwing the dice.
angela says
Thanks, we were in debt and on a low income, its been a hard slog to get here but we still cant get to own our own house! ok, we will try again in a few months, thanks again
Sara (Debt Camel) says
You seem to be well on the way! Good luck.
Nikki says
Hi Sara after some advice please. I have 6 defaults showing on my credit file 2 of which are being removed by BT because they were disputed. The others are all from 2014 and 1 is from last year however this is being disputed via the ombudsmen service. If this was to be removed how much could I expect to see my score increase? The older defaults are for small things less than a few hundred pounds. I’ve been working hard to get my score up took out a credit card which I try and keep low and pay in full each month. I want to get a mortgage but need some advice on getting my score up. Also not sure if you can advise…can you use the help to buy equity loan with savings from a life time is a account ? We have 12k in lisa savings but not sure if we would be entitled to the equity loan scheme ??thanks I’m advance x
Sara (Debt Camel) says
Getting the default removed from last year probably isn’t going to help your credit score much – but it will make your credit record look a LOT better to potential mortgage lenders.
The 2014 defaults – have these been settled?
I don’t know what you can’t use a money in a LISA as a deposit for a help to buy… if the worst comes to the worst you can just take the money out of there.
Nikki says
Thanks for the coming back to me. No these aren’t settled to be honest I didn’t even know about them and am disputing them st present. Worse case scenario I can clear them as they are for silly amounts £14 £96 basically all under £100 but I am disputing them as I don’t even know what some of them relate To. If I had known about them I would of just paid them being that small. Do you have any tips for increasing my credit and what the average score is to secure a mortgage? I know it’s hard to establish as it all depends on what your credit is like now. I have a credit card of 200 which I use then repay in full which I thought would help as I’ve been told it shows your responsible but from what I gather it’s best if u keep utilisation low and repay it is this correct? Thanks again
Sara (Debt Camel) says
If you are disputing the defaults because you don’t agree you owe the money, that’s fine, getting the debt removed is oftner the simplest way to get rid of the default.
But if you are disputing them because you don’t think the default is right for some reason but you do agree you owe the money, it’s usually best to pay them and then carry on disputing whether a default should have been added. Then if you don’t win the default removal, at least it looks as though it was settled a while ago.
“what the average score is to secure a mortgage?” I don’t think this is published anywhere. It really isn’t that important because you can be rejected with a perfect 999 credit score if you fail the mortgage affordability checks and can be accepted with a low score if you just have a couple of very old defaults that have been repaid for over a year.
“I have a credit card of 200 which I use then repay in full which I thought would help as I’ve been told it shows your responsible but from what I gather it’s best if u keep utilisation low and repay it is this correct?” using for a something small eg one tank of petrol is the best thing for your credit score. It is NOT better to have a balance as your score gets a boost with a zero balance. It would help if you could get your credit limit increased to say £500 though, see https://debtcamel.co.uk/credit-score-change/
Nikki says
Thank you for your help. I’m disputing the defaults as I don’t think I owe them I have had it confirmed that 4 of the defaults are being removed because they shouldn’t of been applied. Should these be removed or satisfied? The lady at one company said it will update as satisfied but I said this should be removed as it was never my debt. I basically had fraudulent accounts x4 against me which are the 4 being removed. The other 1 in query with Vodafone is being investigated by the financial ombudsmen as they overcharged me on data by about 60-100 pm so this is being investigated. If the to a say I owe it I will pay it but I dispute part of the debt. Should I pay the 300. I know I owe and leave the rest until we have a final resolution? Thanks again and sorry to ask so many questions these are the last I need to know :)
Sara (Debt Camel) says
If the 4 debts were not yours because they were fraud by someone else, they should be deleted entirely from your credit record.
The Vodafone one – that’s up to you, if you haven’t yet been sent a bill you think is accurate,it may be simpler not to pay it until you do. But do tell the Ombudsman you are happy to pay the £300 but want the default removed as you have never yet had an accurate bill.
Jeff says
Pay the defaults off ASAP
Nikki says
Thanks Sara