Even though you have a good credit score, other issues could prevent you getting a mortgage application accepted.
- Late Payments
When applying for any credit, (mortgages, loans, credit cards) the lender must run a credit check. They check previous credit you have had and if it’s been managed in good conduct. Even missing one payment can drastically impact a lenders decision.
- Unarranged Overdraft
Your current account also shows up on your credit file. Your credit file will state your overdraft limit and show the balance of the overdraft. While overdrafts aren’t an issue for most lenders, going over the agreed limit can cause problems. Even if it was just once or twice, it can give the impression of poor money management.
- Cash Advance on Credit Cards
You might not think twice about withdrawing money on your credit card. From a lender’s view, this is another example of being reliant on credit. Alongside the high interest rate of a cash withdrawal, there’s usually additional fees associated with the transaction and some may even charge daily interest.
- Payday Loans
Although the payday loan might have been paid back on time, a lot of lenders won’t consider anyone who has taken one out within a certain time frame. Due to the extremely high interest rates that are associated with payday lending, they’re usually seen as a last resort. Again, displaying to the lender poor financial management.
- Online Gambling
Alongside checking your credit file, a lot of lenders will also request bank statements. If multiple transactions are displayed to online gambling sites, this can go down as a monthly expenditure commitment. Lenders may also take the view that it’s irresponsible budgeting and decline the application.
Although you can’t change the past, if you are thinking of buying a house, now is a good time to look at your current commitments, financial situation and spending habits.
