Friend with bad credit

[freshfruit]

Just in the process of buying a house with my girlfriend. and it seems banking seems to be full of unfair pitfalls for everyday people, for example, aparantly if you have too many credit checks for mortgages (even if there all accepted!!) you can be given a black mark. What a crappy industry!

Anyway the question I'm hoping you can help out with is this. We have a good friend who is looking for a room to rent, and we have a spare room in our new house we would like to let out so we can live a bit more comfortably. Our friend recently came out and told everyone she had got herself into rather a lot of trouble with debt. She has now consolidated this debt and seems to be on the road to recovery. I seem to remember years ago that another friend had problems with credit simply based on the fact she lived in the same house as another member of her family that had ccjs / bad credit etc, this friend had never so much as gone overdrawn in her life!

I guess what we want to know is could me and my girlfriend (who both have perfect credit) be putting this rating at risk simply by having a friend with bad credit living in our house?? (who is unrelated)

Many thanks in advance, James

[Ethel]

I can understand why you are worried but there are simple steps you can take to protect yourself.

You are entitled to look at your credit references from places such as Experian and here you will see listed people who are associated with you - people of the same address and so on.

You can have a Notice of Dissociation recorded on these files so that businesses can see that although the address is the same, there is no financial liability for the lodger and your finances are in no way connected.

[Oneeyedvic]

aparantly if you have too many credit checks for mortgages (even if there all accepted!!) you can be given a black mark. What a crappy industry!

Whilst this used to be true, it isn't so much for mortgages.

When you have a credit check done it does leave a trail - the reason for this is if I was to lend money to you today, I would see a snapshot of your finances. If you had just applied for several credit cards you may next month have a lot more money outstanding than I anticipated. Therefore, if I know that you have applied for some credit cards I may make a different decision.

With a mortgage, you can only have one main mortgage on a property so the number of mortgage searches does not make a difference (although the number of loan / credit card searches would do)