£60 parking fine could wreck your mortgage chances, warns broker

£60 parking fine could wreck your mortgage chances, warns broker A mortgage broker has warned that failing to pay a minor fine or debt — even one as small as £60 — could damage your credit score A mortgage broker has warned that too many people are having their credit scores ruined by failing, or outright refusing, to pay a relatively minor fine or debt. He cautioned that ignoring, or taking the moral high ground over a small fine or trivial debt, could cause significant problems when applying for a mortgage — particularly if an unpaid parking penalty or disputed mobile phone bill has escalated into a County Court Judgement (CCJ). Jamie Elvin, director of London-based Strive Mortgages, which specialises in self-employed and sole trader mortgages, warned that "people simply don't join the dots when they are taking a stand over a small fine or unpaid debt. They don't understand how quickly, if left unresolved, it can impact their mortgage". He went on to say: "A parking fine may only be £60, but if you refuse to pay it for whatever reason, that blip on your credit score could cost you six thousand pounds in additional interest if high street lenders will no longer take you on." Jamie stressed that people need to recognise that lenders only see the data rather than the rights and wrongs of any dispute. Failing to pay a £60 fine could result in a higher interest rate or being turned down altogether — potentially costing someone their dream home. He added: "Lenders are not interested in the nuances and principles of the dispute. Once an unpaid parking fine or bill turns into a default or CCJ, all that they see is black and white adverse credit. That can mean fewer lenders, higher rates or a declined application altogether. The real irony is that someone can have a strong income, significant assets and still end up paying more for years because they took a stand over a comparatively small amount." Jamie urged people to settle any disputed bills and fines first and then pursue a refund afterwards. He went on: "If a bill is wrong, pay it and then challenge it properly. Do not ignore it, because lenders are far less interested in who was right than whether the debt was left unresolved." Jamie highlighted that another common issue causing mortgage problems was people failing to update their address on key documents after moving home, and not arranging mail redirection for six months or even a year - as is widely recommended. He added: "This is arguably one of the biggest mistakes people make on the mortgage front. They move house, don't get their mail redirected, fail to update their driving licence and vehicle logbooks and then a speeding ticket or parking fine that they never know about turns into a default or CCJ. "It's only when they come to remortgage that they become aware that the CCJ is sitting on their credit file and has thrown a huge spanner into the works. In short, a relatively minor dispute can end up causing a disproportionately expensive mortgage problem. "And even if it doesn't prevent you from buying or remortgaging, it will often mean that you will need to pay more, as you'll find only specialist lenders, rather than high street banks, will lend to you."