To want to know what the problem is?

[CrohnicallyDepressed]

Just heard our mortgage application has been turned down. Apparently we don't meet their criteria. They can't give us any more information than that, because they don't make their criteria public.

So AIBU to want to know actually why we were turned down? I presume it's not to do with income/outgoings because we got past the first stage of the process, they rejected us after credit checking us.

We have got our credit reports from experian and they are both rated 999, we declared everything beforehand so nothing should have been a surprise to the mortgage company.

This is the second time this has happened (2 different companies, but same circumstances, we got the agreement in principle but failed on credit check) so I'm starting to feel like I'm banging my head against a brick wall!

The current mortgage people may have declined you soley because another company had - this is a big problem.

The original company may have declined you if you have other debts, a lot of mortgage providers dont like you to have any other debts. But they do like you to have used a credit card and paid it back straight away.

Repeated applications for credit that have been turned down do affect your rating. Also your name change will undoubtedly have been flagged. Also any debt you have at all - even if being paid back will reduce your capacity to borrow more.

I was a lending officer in a credit union and all these things were criteria for concern - even if a person had a good(ish) credit record.

MoreBeta

Can I ask you a question..... Sorry OP for hijacking

Would you know if I had debt on a loan/credit card and overdraft and I had a few grand due that I was going to pay some debt off with where it would be better going? Regardless of interest rates are any of those viewed more negatively? I want to do what's best for my credit rating

Or does anyone else have a clue?

Thanks!

Lauren83 I would pay off your overdraft first. Loans and credit cards are seen as 'acceptable' ways to borrow. Using your overdraft is seen as poor money management. However, if you do this make sure you're in the position each month to stay out of your overdraft as if you're just going to be back in the red a few months down the line then it won't make a difference to your credit worthiness.

That said, you really you should consider interest rates when deciding what debt to pay off as paying off the most expensive first will allow you to pay them all off quicker.

Lauren - your Experian/Equifax credit rating is not affected by the fact you have a loan or credit card. It is affected by applying for lots of credit cards, consumer credit, store cards, etc in a short space of time.

If you have bad debts, CCJs, etc that also affects your credit rating.

However, if you go to a bank they also want to know how much debt you have and how much capacity you have to pay back that debt.

Looking at your case as a loan officer in our credit union I would have suggested to you at paying off your credit card was a god way of increasing your capacity to borrow more. I would want to see your outgoing on loan repayment and interest go down before thinking about lending you more.

A quiet common type of lending we did at our credit union with people on quite poor credit ratings was to go through their finances in detail then prioritise it and look at making an affordable plan that made them better off by lending some money to them on the understanding it was used to pay off certain debts such as payday loans, overdraft, credit card.

In the post financial crisis world banks are now under pressure to lend responsibly and part of that is to look beyond credit ratings and look at a capacity to pay. We as a credit union were doing that before the financial crisis and I was appalled by what banks were doing. It was totally out of control and frankly should have been clamped down on long before the financial crisis hit.

Thanks both its hugely appreciate, sorry I should of started my own thread hope OP doesn't mind? Some of this might help her anyway

I don't need any more access to any credit at the mo, i am living within my means now but I'm paying high interest rates and its getting me down, the overdraft has a staggered daily fee payable so it seems its costing me less per month in interest than my cc (im baffled by it all) my plan for the OD is to reduce my OD by £100 each payday which I can do

My priority is being debt free obviously and paying the least interest but I want to protect my credit rating mainly as I do need the option of accessing credit in the near future (for ivf treatment) so I want to do what's best for that, I should of known it would happen but I had happily been balance transferring between cc to not pay interest until I got refused credit now I'm stuck with a hefty some on a barclaycard that's costing me a lot! Would kill to be able to balance transfer it for the 0% :(

I have cut all non essential spending and living very frugally to get this down, every spare penny is going on debt now and that money is coming soon from my ex husband so will be wise how best to use that

So paying things off but leaving them open is preferable? I'm worried if I use that 3k for debt and need access in 12 months to credit I will still be declined and kick myself I could of kept that in savings but can't justify stashing it when my interest rates are so high

Thanks again!

Dont know what the likelyhood is? We had sold our house in one part of the country and moved down south. We got a mortgage with no problem then we were about to sell up again 18 months later so went to get a mortgage for our new home only to be turned down. Couldn't understand why as we had no outstanding loans, everything up to date, credit cards were used but paid off each month etc when we got our Credit report we found that the couple who we had sold the house to 18 months before had sold the house on to someone with exactly the same name as me. I had on my report her mortgage, credit cards, loans etc. they had combined us into one person.

Wow, running, what bad luck. Was it easy to fix?

Lauren - in your position you could try and ask about getting a fixed rate personal loan from the bank payable over 2 years that has a lower rate of interest than CC. That would reduce your interest payments.

MoreBeta

Thanks for your reply! I'm going to make an appt with my bank when I get that money through and figure where best to use it to pay off and try to consulate the CC debt into my loan

Good luck OP hope you get sorted

There was no problem once I had alerted my namesake and we had both written separately to credit check companies with all our details showing we were 2 separate people.