A MUM was horrified to discover she was refused a mortgage for her new home because she’d forgotten to pay a tiny £4 charge.
Kelly Miles, 33, says she discovered she had a black mark on her credit file when she and her ex-partner applied for a mortgage.
Sign up for the First Time Buyer Guide newsletter
Thank you!
Kelly Miles, 33, was left unable to take out a mortgage and buy a home due to a missed delivery fee Credit: Kennedy Newsand Media
The mum-of-two now checks her credit score regularly to avoid it happening again Credit: Kennedy Newsand Media
Your credit score reflects how reliable you are with credit, and it affects your ability to borrow money. A mark on your file can reduce your score making it less likely that lenders will loan you money.
Unaware of where the mark had come from, the mum-of-two did some digging and was shocked to discover that a missed £3.99 delivery charge was stopping her from buying a home.
Kelly, who lives in Portsmouth, Hampshire, says she had used a buy now, pay later scheme to purchase an iPad mini as a birthday present a year before for her partner at the time.
But despite meeting the £500 repayment for the actual iPad within the six-month period, the advice charity manager was left with a mark on her credit file as she missed the delivery fee.
HOUSE THAT
The most affordable areas for first-time buyers to buy a home revealed
‘NO REGRETS’
I swapped corporate slog for dream job… I’ve HALVED my mortgage & beat burnout
She had missed to pay it as the extra charge had been left off the re-payment plan.
Kelly said: “Young me decided I wanted to get my ex-partner an iPad mini and I bought it on a buy now pay later.
“That part of it was fine, it was on a six-month agreement and I paid it in six months.
“Me and my ex lived in a rental property at the time and the landlord wanted to serve us notice on that rental property.
“We wanted to buy so we went ahead and put the mortgage application in which is when we discovered this big black mark on my credit file.
“It turned out the iPad mini that I’d bought on buy now pay later had a £3.99 delivery charge to be sent to me, which apparently I didn’t pay at the time of purchase.
“But I never had notification of this – I don’t remember seeing a single letter.”
This meant that Kelly was left with a black mark on her credit file and was rejected by lenders when applying for a mortgage.
It also left her unable to take out a mortgage for six years.
Black marks and defaults typically stay on your credit file for six years, regardless of whether you pay off the debt.
As a result, her ex-partner had to buy the house without her, although Kelly still contributed to the deposit after saving for up to three years.
Kelly says she felt “disappointed” when she found out about the mishap.
She added: “I was really surprised – it didn’t spring to mind at all [when we first found out about the black mark], I had to do some investigating through my file to find out what it was.
“I was frustrated because it was out of my control, I couldn’t go in and suddenly edit it.
“I was disappointed and I was annoyed in the sense that someone could put that mark against my name without me having any knowledge or awareness of it.”
As well as impacting her chances of buying a home, Kelly says the mark meant her chances of being approved when applying for credits elsewhere were “quite low”.
Kelly, who shared her ordeal on social media last week, says the 2016 experience has put her off using buy now, pay later schemes and has left her checking her credit score every month.
Kelly said: “Before then though I was never in any debt – this was the only buy now pay later thing I’d ever bought, so I almost had no reason to check my credit score regularly.
“I’m not someone who’s in debt so you would always automatically assume that your credit score must be good, but it wasn’t.”
The mum, who’s since split with her ex, is now hoping to get a mortgage herself and buy a home next year so is keeping an extra close eye on her credit score.
Kelly is also urging other people to check their credit score regularly.
Kelly said: “Frequently check your credit score – especially if you’ve taken out a new product, like a buy now pay later, or a finance product like a credit card or loan.
“You need to check quite soon after you’ve taken it out how that has been placed onto your credit file – checking that the information on there is correct.
“I check my credit score at least once a month now.”
How to improve your credit score
CREDIT scores weigh up lots of different pieces of information, including previous credit applications and payments.
Improving it takes time and consistent financial management, but there are things you can do to help boost your credit score.
Make sure to pay your bills on time every month.
Set up direct debits for bills, credit cards and loan repayments to keep you on track.
You will be monitored on how much available credit you use (credit utilisation) by keeping it low – ideally below 30% of your total credit limit – you can improve your score.
Constantly reaching your limits on your credit cards suggests financial strain, even if you make payments on time.
If you aren’t already, make sure to register on the electoral roll at your current address. Lenders and credit reference agencies use this information to confirm your identity and stability. Being on the register can add a few points to your score
Keep your personal details up to date with your bank and creditors
Limit how often you apply for new credit. Each application you make triggers a hard search on your credit file, which could temporarily lower your score.
Review your credit report regularly with all three agencies to make sure the information is correct.
