Please be reassured you are not “blacklisted” Some clients approach us, knowing that they have a problem and why; others are shocked to find that they have been turned down for a mortgage - having perhaps recently been granted credit for say a car. The important point is to keep a cool head! A few terms are listed below with which you may or may not be familiar. The Credit Report: We all have one – in fact there are several of them, and the most well known are by the key credit agencies called “Experian” www.experian.co.uk Whenever any of us does anything financial – it is reported by all the lenders to these two credit agencies, who track the information in detail every month and keep it on file for you to see and refer to for up to 6 years. N.B. Mistakes are sometimes made (not very often!) and you can get these corrected. It also means that any other lender is able to see a summary of this credit file and they will base their decisions on whether to lend you money by “accepting a mortgage from you” on the house or flat you want to purchase or remortgage. The lenders use the information on the credit file to evaluate you as a credit risk – according to their “underwriting criteria” Some lenders will only lend to those who are “squeaky clean” Others will consider lending money, usually at higher rates and perhaps less “loan to value” (LTV) – say 85% or £85,000 for every £100,000 value as opposed to 95% - say £95,000 for every £100,000 value. Remember underwriting decisions may be less exacting for borrowing a small amount of say £2,000 than a house purchase with say £275,000 of the Lender’s money! So - Get your Copy NOW! - If you know you have a problem, or believe you have one, it is better to purchase a copy of your file (about £15 on line) It will not leave a “footprint” on your file. An experienced mortgage broker can tell you from that file which lenders will lend, how much on what terms and therefore how much it will cost you per month. It is also important to get it “right first time” as additional searches on your file by more than one lender will not count in your favour because a “footprint” is left on the file every time a lender does a credit search on you. What is in it? - The file includes personal information, such as your name, address, date of birth, and Social Security Number. It also includes previous addresses for the past 6 years, current and previous employers, and public records like bankruptcies, IVA’s or other judgments made against you in the courts. Most important, your credit report contains your credit card, mortgage, and loan payment history. This is vital to a lender who wants to know that you are going to pay them each and every month and not pay late, “default” on a payment, or be “in arrears” and so on. If you have not seen your file before, you will be in for a surprise! So if you have been refused a loan, or are getting ready to apply for a mortgage - check your report if you have any doubts whatsoever about your credit history over the past 6 years BEWARE! – if you have “poor credit” some brokers will immediately put you with a lender who will lend you money – but they do not check out all the options and find out the one who will lend it to you at the best rate. That lender may not be on their “recommended panel! – So do use a totally independent broker like Accelerated Mortgages. © Peter Willingham 2007
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