A credit default notice is simply a record placed on your credit file by creditors stating that you failed to keep up repayments on a personal loan, credit card, catalogue, mobile phone contract or other credit agreement. Such notices may have been placed without your knowledge and despite you subsequently clearing the outstanding balance.
Under the terms of your credit agreement you will probably have agreed that the lender has the right to inform the credit reference agencies of any default (non payment).
A default on a credit agreement will harm your credit score and is quite often enough to make a high street lender refuse your application for a mortgage or remortgage. In the post credit crunch era, mortgage lenders are considerably more on guard and even the smallest black mark on your credit file could lead to rejection. Many people do not realise the significance of failing to pay a mobile phone bill. When you take out a mobile phone contract, the terms and conditions will allow the phone company to register any missed payments with a credit reference agency such as Experian, Equifax and CallCredit. As consumers frequently switch phone providers, small amounts of money outstanding can easily be overlooked. When you fail to settle the account, the provider will place a default on your credit file which can cause havoc when it comes to getting a mortgage. Often these defaults are for small amounts of money, typically £10-£30, but in the eyes of the mortgage lenders, this will be enough for them to label you as "high-risk".
However all is not lost. As independent mortgage advisors, we have access to lenders in the UK who are more flexible in their approach. Some lenders recognise there are a number of perfectly creditworthy applicants who are unable to obtain mortgage facilities through high street banks simply because of a minor mishap. These lenders may be able to provide solutions to customers who would almost certainly have been turned down elsewhere. The good news is, the negative impact a default will have on your credit rating will recede over time and in due course could be cancelled out by more recent positive payment information which will reassure the lender.
We'll identify the mortgage lenders and products that provide the best deal for your individual credit profile. Simply complete our no obligation enquiry form and one of our expert mortgage advisers will get back to you with the options currently available.