Mortgage Application and Old Credit Card

[smiley012]

Hi all,

I'm applying for a mortgage with KBC, and they have queried an old credit card which fell into arrears back in 2012. I did clear it off, and closed the account with BoI. I was living out of the country at the time, and didn't realise until a few months after the account fell into arrears that it was an issue. I would say it was no more than 100euro at the time.

I don't owe anything anymore at all, but I'm concerned this could have affected my application with KBC? I remember speaking to BoI back in 2012, and they assured me it wouldn't affect my future credit, but obviously whoever I was speaking to was incorrect with that information.

Has anyone else been in this situation before? Any advice? I'm still awaiting the outcome for my application with KBC, but keen to understand if anyone else has their experience to share?

 

[44brendan]

This shouldn't be an issue with your mortgage application. It must have appeared on your ICB record. Do an ICB check on yourself and then address the issue with KCB and/or BoI Credit Card company. It should show that you have repaid the amount!

 

[Dave_Curry_IMC]

Hi all,

I'm applying for a mortgage with KBC, and they have queried an old credit card which fell into arrears back in 2012. I did clear it off, and closed the account with BoI. I was living out of the country at the time, and didn't realise until a few months after the account fell into arrears that it was an issue. I would say it was no more than 100euro at the time.

I don't owe anything anymore at all, but I'm concerned this could have affected my application with KBC? I remember speaking to BoI back in 2012, and they assured me it wouldn't affect my future credit, but obviously whoever I was speaking to was incorrect with that information.

Has anyone else been in this situation before? Any advice? I'm still awaiting the outcome for my application with KBC, but keen to understand if anyone else has their experience to share?

This is very similar to a query that I responded to here recently, so I will largely copy and paste the response:

It sounds pretty minor on the scale of adverse credit. Some banks would probably look past this, as long as everything else about the application is very strong. Worst case, a lending product with slightly higher rates from Pepper Homeloans should be an option for you, as long as your record is clean for at least 2 years.

As a rule, it's essential to provide full and accurate details of the circumstances surrounding the missed payment. The more information you can provide, the better (dates, statements, proof you weren't living at the address, bonus points for getting a letter from the bank about being a model customer, etc.). Generally, you only have one shot to explain your case, and bank underwriters really don't like to be given inaccurate or conflicting information, when it comes to this sort of thing. If an applicant only offers a vague or even remotely inaccurate version of events, their chances of being approved are hugely decreased.

If you don't get approved for the current application, I would recommend getting the application "pre-screened" by an independent broker, or perhaps by an experienced mortgage advisor in your own bank (disclosure: biased broker). This is because one of these parties can help to build support for your application before it is reviewed by an underwriter. Also, if a particular bank is definitely not going to show any flexibility, then it's better not to submit an application, only for it to be declined. The next bank will not know that it was declined, but the more other lenders they see that did credit checks on you in the very recent past, the more they will infer that you were repeatedly declined, which could bias the underwriter against you. I don't mean to overstate this last point - I'm just saying that anyone in your position may need to play it even smarter than usual.

Best Regards,
Dave Curry, Irish Mortgage Corporation
https://ie.linkedin.com/in/davecurryirl