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Mortgage declined

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Hi. Here is my situation - I am a divorced single parent and following my divorce and sale of the family home, I bought a house outright for myself and my son in 2011. It needs a lot of work and I've been doing that over the last year by maxing out my overdraft, credit card and taking out a £5k loan. There is still lots of work to be done so I decided to get a small mortgage which would pay all the loan etc back and give me enough to get most of the work done.


I approached my bank, Lloyds, and applied for a £30k mortgage. The property is worth £155k. I explained that my credit rating with Experian was not great as it says i am using a high percentage of my available credit. It was referred to the underwriters for two reasons - a manual credit check as I have had two name changes (maiden name, married name and back to maiden name) and because I had a Notice of Correction on my credit file. I provided details of all correspondence regarding the NoC clearly showing that the error was genuine and the other party admitting being at fault.


I received a phone call from the bank last night to say that the underwriters had declined the application for two reasons .....


1. I have used a payday loan company in the last year

2. I have a default from 2002


I hold my hands up to the first one, I've used Wonga a few times in the last 12 months but always paid on time. It is the second point that angered me. How can something that happened 11 years ago have any relevance now? I thought they only took into account the last 6 years? It is so long ago, I can't even remember what the default was. The bank admits that my credit score with them is ok.


Does this mean that I will never be able to apply for a mortgage? How far back do companies look?

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