Agreement in principle declined

[Firsttimebuyer1]

Hi,
I’m a first time buyer and I just applied for a mortgage agreement in principle with Nationwide (it was an automatic online process, with a soft credit check only), which was declined due to failed credit file.
It didn’t say what the problem was, it just said it was due to credit score, and “this may not be due to adverse bureau information”.

I am puzzled. The only thing I can think of is that I accidentally went into my unarranged overdraft twice while a student (2 years ago) but now I have a full time job with a good salary so it won’t happen again. I’ve got 2 years of a solid income and no debts other than student loan.

I am viewing a house on Saturday and had hoped to het the AIP so I could potentially make an offer.

What should I do now? Shall I try for another mortgage in principle with Halifax or another bank that does soft credit checks only, to see if I get a different outcome from them, or is that unwise? Does this mean I won’t get a mortgage from anyone?

Any advice appreciated!

Nationwide are pretty picky about who they lend to. Get advice from a broker maybe.

Definitely speak to a broker before looking at any houses

Find a good mortgage broker.

(By the way when I went into the overdraft I put more money in within a day’s grace period both times, so I thought I was in the clear, but maybe I was wrong about that.)

Okay, thank you!!

Sign up with someone like Clearscore and see what's on your credit score. It's free I believe.

Have you done a check of your credit online to see what's been recorded about you?
That would let you see similar things to what the bank can see.
Once you know that you can work out how to fix it.
I was quite glad I did a credit check as I found out I had a store card open. I had tried to close it and it hadn't worked. So that helped once I knew about it and closed it.
You could ask a broker to find a mortgage provider that will work with you.
It could be something straightforward like not being on the electoral register.
There's quite a bit on the moneysavingexpert website about it all.

Go to a broker, they will sort you out

Check your credit reports with the 3 main ones.

Go to a whole of market broker (London and Country are good and free!) and explain what has happened so far. They will be able to advise and get an AIP for you pretty quickly.

Can you do one of those free online credit scores to see if there is anything you need to do to improve your credit score.

In my experience nationwide is much stricter to get a mortgage with - most building societies are - (my first mortgage was with them but when we tried to remortgage 5 years later and release equity they flat out said no so we went elsewhere)

I would go to a bank instead

Also 2 years of employment probably isn't long enough for a lot of lenders - I think it was at least 5 years for me but if you have a good deposit you should find somewhere

You need to check your credit file and then I’d suggest finding a mortgage via a good IFA. They will know the lenders that best suit your circumstances so you don't waste time on the wrong lenders. Often there is
No charge as their fee is covered by commission.

You can check your credit report on Experian or a similar service.
You may find something you were not aware of and advice on ways you can improve your score.
Are you on the electoral roll?
Also, sometimes having no debt/credit accounts does lower your score

So do you have no credit history?

The other thing could be that I asked for a credit check about 6 years ago, with Experian, because I was told it was good to know what your score is. They sent me a document I didn’t understand at all. It was all numbers if I recall, no prose explaining what it all meant. I gave up on it.

Anyway I know you’re not meant to do many credit chcecks, so maybe this is counting against me.

You say you don't have any debt, do you have any credit history? My grandmother was appalled to be turned down for a John Lewis store card about fifteen years ago and it transpired she has a poor credit score because she doesn't borrow anything. Her mortgage is paid off they have basic utilities but no mobile contracts, HP, finance etc and as odd as it sounds they don't know if she'd pay back what she borrowed because they've nothing to compare against. She now does her grocery shopping and petrol on a credit card which she pays off. When they bought a new sofa they got interest free credit over the year and paid it off even though they had the money in the bank to buy it outright. She says you never know when you might need your credit score and she thought by saving up and paying for things she was doing the right thing, but she had no credit footprint.

I don’t have much of a credit history.

I worked for 8 years, stead income, no debts. Then went to uni, which was very hard financially. After the overdraft incident I got a credit card. So I’ve had that for 2-3 years or so now. And I now have a professional salary and have had an inheritance, so in a position to buy (I hoped!)

Checking your credit score does not affect your credit rating OP. Try ClearScore, Experian & Equifax. If you've never had credit you may not have a good credit score.

I do have a mobile phone contract...

Cross posted and see you have had credit. I'd check your score online then as you should have some credit history. Your salary won't be on a credit report so won't make any difference.

Is it REALLY okay to check credit score online?? I have read multiple times that checking your credit too much actually damages it??

(Thanks for all the advice everyone)

Mortgage broker will find you the best option and I know that they'll try Halifax as they are least picky. Lenders have an internal score system, even if you have a good score with Experian you may not score enough points with the lender to pass their checks so don't be too downbeat

Check your credit report and get a good mortgage broker

My nice had exactly the same thing with the Nationwide - something to do with her credit score. So she rang them and got an agreement in principle with no problem. When she found a property and had her formal interview/ application they offered her £10k more than the agreement in principle.
Don't be disheartened and give them a ring.