If you have late or missed payments showing on your credit file, it will not help your mortgage application but fortunately in today’s specialist mortgage market we do have lenders who will take a view on late and missed payments depending upon what they are in respect of, and how historical they are.
No lender would like to see late or missed mortgage repayments as it sends out the wrong message to the mortgage underwriter. What most of our specialist lenders would accept is none in the last 24 months, with a few saying none in the last 12 months with the odd exception at a low loan to value saying none within the last 6 months and maybe 1 within the last 12 months.
With regards to un-secured lending no late or missed within the last 12 months would generally be accepted, with lenders generally taking a view with regards to late or missed on Mobile phones or Utilities. In respect of credit cards, mail order, overdrafts and unsecured loans the decision will be impacted by how many payments have missed within the last 6 and 12 months, and the amount of deposit that you are putting down.
The bigger deposit that you have the more flexible and understanding the lender will be as low loan to value means less risk to the lender. Again no late or missed within the last six-months and what the lender will accept as late or missed within the last 12 months will depend upon the loan to value.
Can I get late or missed payments removed from my credit file?
Unless you can prove that the provider has made an error with the information given to the credit agency it would be unrealistic to expect to get the file amended. In some circumstances if it is one late payment the provider may as a good will gesture agree to remove it, but this would be the exception not the rule.
How do late or missed payments affect my Credit Score?
What you have to understand is that you credit file covers all of your payment profile over the last six years. The more recent payment profile will have more of a negative impact on your credit score if you have late or missed, but lenders who are carrying out a manual underwrite would be less than impressed if the late or missed profile appears to be consistent over the six-years.
Lenders tend to take more of a view if the late or missed was as a result of something outside of your control, break up of your marriage, redundancy, loss of your employment or illness. Following the problem they would then like to see that you have made every effort to get back on track.
When the lender bases their decision on credit scoring, which the bulk of the high street lenders do it would be unlikely that they would consider an application. This is where the specialist lenders really help us as the underwrite is a manual one and based on common sense criteria.