Wonga on credit report affecting mortgage application!

[Bambilegs]

Hi all,

 

I'm currently going through the process of buying my first property and have hit a brick wall in the application!

 

I am applying for a mortgage through Aldermore. I have 3 defaults on my account but they were all satisfied over 40 months ago now. I declared these on my initial application which was fine. My LTV is 70% as I have a good deposit. However I've now been advised my application has been referred due to the payday loans I took out almost a year ago.

 

I took out these payday loans with Wonga after seeing on their website getting short loans and paying them back on time can improve your credit rating. Obviously now I know this is not the case.

 

I've just had a very tedious call with Wonga who could only say, they can not do anything about my credit now, and to try with another mortgage company. I asked to speak to a manager and they point blank refused which I thought was terrible customer service. I got the names of the people I spoke to.

 

I'm so annoyed, because at the time I didn't need the loans and not did it to improve my credit. I paid all of them back early and never a big amount.

 

Is there anything I can do? I've heard people have managed to get these removed from there credit report due to wonga saying it will improve your credit score, when in fact it doesn't. I'm panicking ill lose my house due to this.

 

Any help would be great, thanks!

[Ford]

check whether those prior defaults should still be on your record, defaults expire after 6 years.

so, you didn't default with wonga?

and, atm, you have not actually been refused?

[Bambilegs]

Thanks for getting back so quick!

 

All 3 defaults will be removed within the next 18 months. One sooner by next feb.

No didn't default with wonga, paid them back early every time. But it's showing I loaned with them 12 times on credit report.

No, not been refused at the moment, but it keeps getting put back. They asked me to add another 6k on to my already large deposit, which I agreed to, then heard nothing for a week!

[Ford]

does seem odd, if no defaults with wonga, as paying back any credit on time/early should be a good thing. maybe its the rep that follows with those paydayers! but, 'reputation' shouldn't affect any credit score/mortgage decision?

see what the mortgage co comes up with just now? if declined and def due to wonga, then could take matters further. what did the mortgage co say re wonga credit?

[postggj]

It was reported last year that any future lender who sees a payday loan on a credit file will probably decline a credit application as it shows desperation and financial insecurity.

 

I believe it was credit today that carried that story

[Ford]

oh ok, so it is the rep? will look for that. any reference?

[citizenB]

http://www.guardian.co.uk/money/2012/nov/17/payday-loans-credit-rating

 

Because Pay Day Loans are generally targeted at those people who have difficulty obtaining credit even if you repay them on or before time it is being seen by mainstream creditors that you have been desperate for cash at some point.

 

From what you say, you have done this on 12 occasions !!

 

I think it is very wrong to have allowed the PDL companies to use improvement of credit scoring within their advertisements, it couldn't be further from the truth.

[Ford]

thanks citb, interesting. yes, so any claims by wonga or the like that their loans can improve credit rating needs to be reviewed! OFT, where are you?

[Bambilegs]

Thanks for all your replies!

 

Yeah, this is the problem I'm having, saw the advertisements and thought "great, an easy way to improve my credit score and show I can repay early!" And then obviously it's been released this couldn't be further from the truth, so annoyed because as mentioned, I didn't even need the cash at that point!!

 

Aldermore are still making their decision at the moment, but they have questioned affordability due to the payday loans, but I haven't had one since September last year, and didn't even need them then!

[renegadeimp]

Did you take out 12 loans with wonga. If so, thats ONE of the reasons you are being turned down. It makes you seem desperate for money. The defaults are the main problem. Just one default will cause many mortgage applications to fail. Even though the banks are the ones that caused the financial crisis, they are passing the buck onto the regular person now and making them have a perfect score (which is very rare lately).

 

My advice, would be to wait for the defaults to drop off and try again, but DONT be tempted by sub prime lenders. Also, if you see ANY PDL saying they can improve your credit score, make sure they are reported.

[Ford]

hasn't been refused as yet?

was going to say, done well to potentially get a mortgage with 3 defaults albeit with a large deposit. seems the paydays have added to their indecision/delay!

[Bambilegs]

Yes, unfortunately at the time I thought I was helping myself, so took out one a month thinking my credit was improving! Not took one out since September last year.

 

In regards to the defaults, my mortgage broker suggested aldermore as they suggest they will accept defaults as long as they've been settled over 36 months ago, which mine have. Obviously I've agreed to pay higher interest rates because of my past, and also got a large deposit!

 

Do you think it's likely I'll be refused then? And do you think I would have a chance getting wonga to remove there entries on my credit report due to false advertising?

[postggj]

If you really want a way to improve your credit rating apply for a Cash Plus Pre-paid master card

 

Their credit builder reports to the credit agencies each month

[Ford]

@bambilegs. yes, no doubt higher interest to start. but, that can be consolidated later when things improve. check the terms re settlement/remortgage. wait see what the mortgage co comes up with first, then post back for any input?

[renegadeimp]

Fingers crossed with the mortgage apps. Lets hope they see that the defaults were almost 4 years ago.

[Bambilegs]

Thanks for the advice. I'm hoping to hear more from Aldermore on Monday, Guess its a sleepless weekend for me.

 

The estate agents are putting a lot of pressure on as the vendor is ready to move forward. Just hoping this issue won't lose me this house.

[citizenB]

Is Wonga still advertising that you can improve your credit score by taking their loans ?

 

I would in the first instance make a complaint to the OFT and the FCA - explain the reason you took the loans, show that you repaid on time so they see they pattern and ask what they are going to do about this ?

 

I would also copy your complaint to Wonga.

[Bambilegs]

No they don't advertise anymore as they were investigated for it late last year. I may still have an email off them promising such in my archive though, I'd have to look.

 

I think I'll do that and contact them just in case worse case scenario happens with my mortgage application.

[citizenB]

Please let us know how you get on.

[Bambilegs]

Will do, thanks again.

[Ford]

did a quick googly re aldermore, they seem ok (although their investors once owned caboot ). trust you have browsed the market to get the best deal in the circumstances?

[Bambilegs]

Yes, did a personal search, plus my mortgage broker is a family friend and looked down all avenues for me. He did say he had a plan B if this didn't go through with Aldermore, but just worried ill lose the house while trying to find a lender to fit my circumstances.

 

I'm hoping Aldermore will accept though. There getting a good deposit off me, and can easily sell the property for what there lending me for it, if worse came to worse and it was repossessed, which it never would be. Hoping that plays a part in the decision making.

[Ford]

yes, on their site they say that they give around 75%. see what they say on monday, you won't know either way until then anyway? post back

[BRIGADIER2JCS]

I am told by a broker associate that more than 2 PDLs in 6-12 months would be considered a sign of 'credit hunger' and would affect credit applications severely.

[Ford]

at least then they have removed that 'credit improvement' from their ads! post #18

so, is a credit card different? eg is having say 3/4 cards always paid on time negative?