Mortgage application and credit rating

Cel982

Anyone got experience of applying for a mortgage with a less-than-perfect credit rating?

Mr. Cel982 had a recent cock-up with his credit card. Basically, we opened a joint account and he switched his salary to be paid in there. He still kept his old personal account open, and had a little-used credit card which was paid by DD from that account. That account gradually drained as there was no further income going into it, and the occasional outgoing. Then he must have bought something on CC for which there wasn't enough left in the account to pay the DD. Unfortunately we had moved house in the interim, he hadn't given the bank his new address, and so the bill remained unpaid and his CC was cancelled. When he did find out - a few months later - he paid the debt (about €300) in full immediately.

So yes, it was a balls-up, and absolutely his fault, which he fully accepts, but it was an organisational problem rather than a solvency one (not that the banks will care, I know). My concern is how this will affect our credit rating when we come to apply for a mortgage in the next year or two? We have good earning potential and no other debt at all, until this little snafu we would have been model applicants. Will it completely scupper our chances? Any advice greatly appreciated!

Trish56

First thing he should do is apply for a credit report at www.icb.ie. If the credit card issue shows up it will remain there for 5 years after it is paid off. When applying for a mortgage the lender will have access to the ICB information so it's best to be up front with them and bring statements and any other evidence to show it was an oversight etc. and arose due to change of house.

Cel982 wrote: »

Anyone got experience of applying for a mortgage with a less-than-perfect credit rating?

Mr. Cel982 had a recent cock-up with his credit card. Basically, we opened a joint account and he switched his salary to be paid in there. He still kept his old personal account open, and had a little-used credit card which was paid by DD from that account. That account gradually drained as there was no further income going into it, and the occasional outgoing. Then he must have bought something on CC for which there wasn't enough left in the account to pay the DD. Unfortunately we had moved house in the interim, he hadn't given the bank his new address, and so the bill remained unpaid and his CC was cancelled. When he did find out - a few months later - he paid the debt (about €300) in full immediately.

So yes, it was a balls-up, and absolutely his fault, which he fully accepts, but it was an organisational problem rather than a solvency one (not that the banks will care, I know). My concern is how this will affect our credit rating when we come to apply for a mortgage in the next year or two? We have good earning potential and no other debt at all, until this little snafu we would have been model applicants. Will it completely scupper our chances? Any advice greatly appreciated!

Cel982

Thanks Trish, will definitely do that before we start the process.

Anyone else been through it themselves? Or work in mortgages and could advise how the bank are likely to react?

PaulM1977

Be upfront about it and it will be to your advantage as the banks don't like when something is not declared to them and they find out about it. Definitely get the ICB report back too.