Changes to credit checks could affect first-time buyers

Permalink: Changes to credit checks could affect first-time buyers
by Kay Murchie

According to mform.co.uk, the online mortgage company, first-time buyers could be refused loans due to modifications in credit checks.

Later this year, information regarding student loans will be integrated into people’s credit files. Consequently, any missed payments to the student loan company will show up as a black mark on credit ratings.

Currently, the average age of a first-time buyer is 29, many of whom will have student debts. A date has not yet been set when this will be implemented but it is expected in late 2008.

A spokesperson for mform.co.uk said these changes are unfair because it will only include missed or defaulted payments.

Therefore, any details of how you have made all of your student loan repayments will not be available to have a positive impact on your credit rating.

The spokesperson added that the average student can face debts of over £20,000 by the time they graduate while their average starting salary is approximately £16,000.

It is likely that many students miss one or more of their student loan repayments and credit reference agencies will soon have this information. If they can see a history of missed payments here, it is likely that lenders will be reluctant to lend them money.