Checking credit rating

[stoo_pid]

Mate of mine is more than a little surprised as he has just been turned down for a new mortgage.  He previously had a mortgage which he never missed a single payment & has now paid off completely.  He now has �80,000 worth of equity yet when he applied to his previous lender for a mortgage on the new property they turned him down.

He has never been behind with any loans or credit card payments & has no outstanding balances.  He has had one spot of bother in the past when changing banks (something along the lines of disputed bank charges - around �100 worth) but he ended up out of pocket just to get it settled.

The only other thing he can think of is he had a so-called mate staying at his address for a few months & he ran up a few unoaid bills.  He ended up paying it back but only after he received a CCJ.  However, I was under the impression that this shouldn't make any diference.

When he asked the lender why they turned him down they said they couldn't tell him.  He has contacted Equifax & Experian (I think they're the companies) for his rating but really wants to get this sorted quickly so the chain can get moving again.

Does anyone have any ideas:

• What else could be affecting his almost spotless credit rating?
• If he can check his credit rating online instantly?

Thanks in advance for any info

[stoo_pid]

Just to clarify, it was his mate that paid off the outstanding bills & got the CCJ.

[jake-the-peg]

The idea of a "credit rating" as some sort of magic number that companies check is a (marketing) myth.

They get the whole credit report and use their own criteria.

Sometimes if you've been shopping around a lot and many people have run searches on you that can look somewhat negative but the big credit alarm is the CCJ

I'd say the most likely explanation is the CCJ at his address  

[Oneeyedvic]

A credit rating is not a myth but a fact. Equifax can supply you with a credit rating.

However, each company has its own scoring system which is obviously kept confidential.

You get certain points according to how long you have lived at a premises, if you supply a phone number, how many agreements you have running, what your occupation is etc etc etc.

This will generate a number - eg +50 if on voters role; - 100 per ccj, +20 for paying bills on time.

If this number is above the lenders criteria number (and this changes on a monthly basis) then you pass. If it is just below, it may be passed to an underwriter to have a look at, and if it below a certain number it is an outright decline.

 

You can check your credit rating with Experian on line, however you can't do it instantly. They send you a password to your home address - this is to avoid anyone else checking you rating / id fraud etc.

If the CCJ is in his mates name then it shouldn't affect your mates rating.

There may be an assocaition made between them both. That is the only reason I can think of (given the above) that he may be declined - this means that a lender thinks that his mate is financially linked to your mate - and if he doesn't pay his bills, your mate might not either.

When the reports come through, check to see if there is an association - if so your mate can file a 'notice of disassociation'.

 

Hope this helps

[Mommavic]

I have had a similar experiance, my partner was not good with his money at all and had a few late payments and referred direct debits over the years and yet I havn't, however when I applied for an egg card they turned me down. After receiving my credit report from experian, it explains that your rating involved the building where you live ( if it is blacklisted etc) also anyone who you are associated with, hense my partner as we owned a house together.  In the case of your friend, was he registered living with you on the electral role, if so this will be a factor, also if he simply changed his address with banks, work and any other companies this will be logged as his abode and therefore associated with you.  You can rectify this by writing to experian or equifax to disassociate yourself, or phoning the companies direct.  Also if you havn't already done so apply for your credit report from both companies (as thaey hold different info) which cost roughly �2.50 and this will completely detail your credit and give you a list of associates, plus it takes no time at all.  You can also do this over the net, and once registered view it whenever you need.

[Hermia]

I checked my credit file with Equifax and it only cost a few quid so it is worth doing.

[sandras]

I was led to understand that if you have no credit (i.e no mortgage in this instance) that you won't automatically get credit as you have no credit score.

Your friend should have left a small amount outstanding on the property - say �1,000, so that his excellent record would be available to be picked up by credit agencies.

He needs to get a credit reference going again - tell him to order a catalogue and start ordering goods from it - this will help his credit score kick in again.

Hope this helps : )