Do I have any options?

Here is a quick overview of my situation,

I'm hoping to purchase my first property within the next 2-3 years, looking round the $300,000 mark.
I am currently putting $450 a week aside, currently sitting around $30,000 in my savings account.

I've been in my current job for over three years, paying around the $60k mark, working in IT.

Now my problem, i'm sure you've all seen this plenty of times before.
Around 4 years ago, I was living in a share house, electricity was in my name (bad mistake).
As the people I was living with were my friends, when moving out, I didn't close the electricity account, the others assured me they would keep paying the bill, and as we had never had any problems with paying the bill before, I believed them.
Fast forward 12 months ago, I check my credit report, and see I had a default of $1400 with the electricity company, listed 18 months ago.
I phoned up, and paid the account on the spot.

So anyway, now I've got this bad mark on my Dunn and Bradstreet credit report (my veda report is clear, with a 850+ score).
Other than this, my finances are good, never carry a balance on my credit card, have solid savings.

Any recommendations on what my next move would be, i'm stuck with a default on my Dunn and Bradstreet report for another 3.5 years.
Anything I can do to improve my situation, or anything I can do to make this look better to the lender?
 
Here is a quick overview of my situation,

I'm hoping to purchase my first property within the next 2-3 years, looking round the $300,000 mark.
I am currently putting $450 a week aside, currently sitting around $30,000 in my savings account.

I've been in my current job for over three years, paying around the $60k mark, working in IT.

Now my problem, i'm sure you've all seen this plenty of times before.
Around 4 years ago, I was living in a share house, electricity was in my name (bad mistake).
As the people I was living with were my friends, when moving out, I didn't close the electricity account, the others assured me they would keep paying the bill, and as we had never had any problems with paying the bill before, I believed them.
Fast forward 12 months ago, I check my credit report, and see I had a default of $1400 with the electricity company, listed 18 months ago.
I phoned up, and paid the account on the spot.

So anyway, now I've got this bad mark on my Dunn and Bradstreet credit report (my veda report is clear, with a 850+ score).
Other than this, my finances are good, never carry a balance on my credit card, have solid savings.

Any recommendations on what my next move would be, i'm stuck with a default on my Dunn and Bradstreet report for another 3.5 years.
Anything I can do to improve my situation, or anything I can do to make this look better to the lender?

Not all lenders check Dunn and brad, some only use Veda, I do believe but don't quote me on this that Suncorp only check Veda, make sure you check
 
there are a couple of lenders who can do 90% with a utilities default. they would prefer it to be for a lesser amount.

Ive had some success referring clients to a credit repair solicitor, however having already paid the account in full means your leverage getting it removed entirely might be limited.

Id still think it was worth a call. If the default was in any way lodged incorrectly, you werent given the correct notice etc, then it can be removed entirely like it never happened.
 
From what I've heard getting a default wiped can be very expensive though.

There are lenders that will look at credit impaired, although the rate will be higher and it can sometimes be a bit of a red flag when refinancing to another lender.

There are pros and cons -

Pro - you get your loan

Con - you pay for it until you can refinance, which in your case may only be a year or two after you buy assuming you have a 20% deposit when you purchase.

The real trouble is when you are buying at a high LVR and mortgage insurance is in the mix, making it expensive to refinance and a less attractive deal to a mainstream lender.

Sub 80% isn't so much of an issue.
 
The guy I use charges $1,800 total. $600 to start, $600 if they find something that can be used to request the listing company to remove it, and lastly a success fee when its actually been removed.
 
there are a couple of lenders who can do 90% with a utilities default. they would prefer it to be for a lesser amount.

Ive had some success referring clients to a credit repair solicitor, however having already paid the account in full means your leverage getting it removed entirely might be limited.

Id still think it was worth a call. If the default was in any way lodged incorrectly, you werent given the correct notice etc, then it can be removed entirely like it never happened.

Would you mind please PM'ing me with the details of the solicitor you have used in the past?

Also, I guess I should also make a plan in case the solicitor is unable to help. I understand that there are a few lenders that will do <$1000 utilities defaults, but are there any that will do a $1400 paid default? It's been paid for over a year now, by the time I apply, it will have been paid for 2-3 years.
 
That's actually not too outrageous - I've heard of it being thousands.

You do have options. If you're looking at an 80% lend, there are definitely lenders who will help - ME bank is one who isn't a specific non-conforming lender, as well as others like Liberty, Pepper etc who specialise in that kind of thing.
 
Hi Jimmy

You may have some luck with non credit scoring lenders with a DUA. AMP are usually good in this regard - but I'm not sure if the $1400 amount is beyond the threshold of what they'd be willing to consider.

Tobe's guy sounds like a very good option. Tobe - would you be able to PM me his details too? Sounds like a handy contact to have.

Cheers

Jamie
 
Think everyone needs to take a step back, the OP is looking to buy in 2-3 years.


How much do you plan to save in the next 2-3 years?

90% LVR you're going to need approx $45k

80% LVR you're going to need approx $75k


I would be pretty conifident in you being able to borrow funds in 2-3 years time if you had regular savings history, no other defaults, add in a credit card with great conduct and account with the bank you're planning to borrow, LVR <90% preferably 80% by then and you're good to go.

Most would prefer the default <$1000 but it's still a utilities default and if can provide some evidence around you actually living at a different address throught he period would likely help.
 
Think everyone needs to take a step back, the OP is looking to buy in 2-3 years.

Yep - first thing I looked at but it's unlikely that default is going to be removed on its own by then.

If they can save more and dodge LMI by that stage then sure - it opens up more opportunities.
 
Think everyone needs to take a step back, the OP is looking to buy in 2-3 years.


How much do you plan to save in the next 2-3 years?

90% LVR you're going to need approx $45k

80% LVR you're going to need approx $75k


I would be pretty conifident in you being able to borrow funds in 2-3 years time if you had regular savings history, no other defaults, add in a credit card with great conduct and account with the bank you're planning to borrow, LVR <90% preferably 80% by then and you're good to go.

Most would prefer the default <$1000 but it's still a utilities default and if can provide some evidence around you actually living at a different address throught he period would likely help.

At the current rate, I should be able to hit the $75k within three years, I'd love to purchase sooner, but at the same time, with this default, I assume I'm pretty much going to need to have at least the 20% otherwise even if the lender is ok with the paid default, I would get knocked back on the LMI.

My savings are currently with ING, I currently bank with NAB and my credit card is with Citi, would it help if I attempt to find what lender I will possibly be going with, and move my accounts there, so that they are able to build up an idea of my financial position? Are any of the financial institutions I currently have relationships with suitable for this?
 
Yes it would help if your savings, income and credit facilties are at the bank you plan to borrow from. It gives them an idea of your financial position and assist with credit scoring (for those that do).

So to clarify you're looking to purchase inside 2-3 years if you're able to?

Shouldn't have too much troubles if you're under 80% then in 2-3 years time.
 
Thank you for the PM, I'm happy for you to share, it may help others as well.

Ran this senario through someone high up in credit with CBA.

Comments are

- Sure that CBA's credit check is through Veda (although the CBA privacy form allows Brad & Dunn as well) so it may not even show up.
- If application scores category 1 to 3 then can be sent off to genworth
- Genworth are jumpy with defaults over $1k but could be mitigated with evidence (living elsewhere, strong employment, low debt etc)
- If application scores 1 or 2 and LVR <90% application might fall under LDP which will be the banks decision
- Reckons it worth sending up.

If the above interests you and you were looking to buy before the 2-3 years, then you want to try and ensure application scores the best. Would want the application <90% LVR and I would have accounted opened with CBA having salary credit into that account and credit card making sure this facility never has late payment or overlimit (low balance would be best), this will boost your scoring. Based on your current savings of $30k should be few months before you have the required amount and submit an application.

Noted that the credit officer I spoke with is very high up. He sit in the same office as the genworth guys so has a good relationship with them
 
It's great that CBA is a possibility, thank you for asking your contact for me, this is the direction I will probably end up going down if the banks I currently have a relationship with are not suitable.

Do Citibank check both Veda and D&B for home loans?
I already have my credit card and a transaction account (for travel) with them, and I could move my savings easily enough. Or are they just not even an option?
 
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