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!

@KingdomScrolls

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.

This is a good thing to check. I was shocked to be turned down for a phone contract soon after I'd started my first job due to lack of credit history. I then got a credit card and used it for small purchases regularly and my credit history is now fine.

I agree with the recommendation for London and Country. They were brilliant and free.

@Firsttimebuyer1

I read the clearscore info more carefully. I am on the electoral role and 7/7 of the key things were ticked.

I do have one mark against me for payments- one missed payment in 2016. I remember this, I went abroad and accidentally ended up with a huge roaming phone bill. When the bill came I queried it. Eventually I did have to cough up, but it was late and a palava.
So maybe that’s it.

Yes that will definitely be it. Same thing happened with DH, and when we got our first mortgage it was still on his credit file and really limited us - much higher interest rate and fewer lenders.

Two years later, we remortgaged with a much better rate and borrowed more (with Nationwide actually). His situation was almost identical except the debt was written off after dispute but was still shown on his file as unsettled - he had to pay it to get it sorted. So if it’s showing as settled on yours, that’s something.

@ivfgottwins

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

I actually found the opposite - I’d been working for a year and a half and DP doing a PhD so technically not even employed and got a mortgage with a building society (not nationwide) as they were willing to be a lot more flexible than banks. OP, keep an eye on your credit score, maybe look at getting an AIP with a different lender and consider speaking to a broker if you still struggle.

I recommend The Mortgage Place (free impartial) - really friendly and got me my Agreement in Principle within the hour this week.

Check credit score with clearscore or experian.

Nationwide said no, Natwest said yes.

Make sure you're on the electoral register.

Buy things on credit card every month, and clear IN FULL every month. This builds your credit rating.

Make sure last 3 months of bank statements show you not in your overdraft and managing finances well.

Never borrow money on the credit card (as in cash out hole in the wall)

No debt, or if you do, older than 6 years so it disappears off credit score.

A good broker will help you.

Hard checks really hurt your credit score, and if you do one hard check and it says no, likely others will say no too.

Good luck!!

Also take a look on the other free online credit report - Credit Karma.

There are 3 main credit reference agencies in the UK: Experian, Equifax (ClearScore) and CallCredit (CreditKarma, used to be called Noddle).

I use the ClearScore and Credit Karma apps to check what’s listed about me and I check them regularly (it doesn’t impact your credit file at all). Different credit reference agencies may hold different things about you, because lenders and credit companies will use specific ones. So what’s on one may not be on another etc.

You can get a free credit score from Experian, but you can pay a few pounds to get them to send you your full report. You can sign up to see your report online with them whenever you like, but they charge a lot for the privilege (think it’s like £15 a month - scandalous considering the other two are free!)

Don’t just go by the actual scores. They will be different on each reference agency and they score differently. You need to look at what’s actually listed on there. That’s what lenders look at.

Don’t panic op I’m sure it’s a computer glitch and you will be fine with a different lender. Good luck!

I did an AIP with nationwide a while ago and it was a phonecall not an online thing. Are you sure you didn't just use the online calculator?

Nationwide are shit bags. They are still holding people mortgage prisoners with their umbrella company UCB Home Loans and still getting away with charging 6% APR. They wouldn't let us remortgage to them, even though never missed a payment and could afford a cheaper mortage (which they said we couldn't afford?!?!?)

Speak to L&C mortgage brokers.

They're both free and independent, and get lots of recommendations (I found them via Mumsnet!)

I used them both times I got a mortgage and they were great. I'd never go to a bank as they only have their own products to push.

www.landc.co.uk/

@doublemonkey

I did an AIP with nationwide a while ago and it was a phonecall not an online thing. Are you sure you didn't just use the online calculator?

I've always done AIPs online, most recently about a month ago.

You say you don't have credit other than a mobile contract...this is your issue. There is nothing for them to check against of that makes sense.

A brokeray advise you to get a credit card and use for a couple of months before trying again for mortgage

Different bank use different credit scoring agencies. Check Experian and credit karma and make sure it all looks right before you try again

@Firsttimebuyer1

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

It’s applying for credit too many times that’s the issue. Checking it on an app does nothing to your score. (The score itself is meaningless incidentally, but that’s by the by.)

Nationwide are notoriously stingy so get yourself to L&C and you’ll have an agreement in principle in no time.

It’s probably a lack of a credit history. Lenders need to see a history of borrowing and paying back. We flew through a mortgage last year with Nationwide. we’ve got debts, two cars on PCP and I’m in my overdraft more often than not…BUT I always pay my bills on time, that’s all they really care about. Mortgage broker would be your best bet, they’ll know which lenders will accept a weaker credit history. Also check your credit report, there could be some surprises on there!

Definitely check your credit score. Go with clear score as they actually give you a proper report. My credit score was dodgy because my sister decided to open a store card in my name and default on the payments-I shit you not 🤦🏻‍♀️

@TammyS86

That happened to me too, but was my brother. Was not impressed.

A good mortgage broker will check a credit report and advise accordingly. Nationwide are one of the toughest lenders. A missed payment and or unauthorised overdraft will trigger an automatic no for a lot of lenders. A good broker will know which ones to go to. You may need to pay a bit more but there are some good deals out there. A broker may charge for application but should manage all the application process for you. AIPs do affect your credit score so be careful.

Email the ceo of the mobile phone company and explain how this happened and that now it’s stopping you get a mortgage.

This is how we got accepted with natwest, no one would lend with that on dhs file 🙄 which I’d told him years previously just pay it and argue later ffs.

@Firsttimebuyer1

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.

Checking your score doesn't register as a credit check.

I currently work for NW and this decline code it really common. Not due to adverse bureau information means that your credit score might not be bad, but you've not met our internal risk threshold. So you could have a good score but not good enough if that makes sense, as PP have said we are fairly risk adverse compared to some other lenders.

As you did it online I'd definitely give them a call tomorrow and do your dip over the phone with us to check you've not miskeyed anything and we'll have a look into it.

Please don't worry, having a couple of credit searches and dipping into an overdraft years ago won't stop you getting a mortgage!

London and Country helped me when I had problems and couldn't work out why. Promise I don't work for them and they're free.

broker!

also start using a credit card, pay it off monthly in time.

I was rejected loans previously due to zero credit, have a mortgage but that is it.

Now have a loan, and they would lend me 50k which is terrifying.