I am working abroad for the British Government and use a British Forces Post Office address.
At the same time, I want to buy a home back in England. My BFPO address has been a huge sticking point when trying to get a mortgage decision in principle.
It means it can appear as if I have gaps in my credit history, because BFPO addresses don’t seem to be registered on some banks’ and credit agencies’ online systems.
I approached a high street bank which claimed it had a special unit to help overseas military and government workers with their finances. However, it didn’t have a solution for this credit history problem and therefore I failed the credit check.
I have always been registered to vote in Britain, but as a crown servant which I believe does not show up on credit checks. I have never missed a credit card or bill payment.
Most of my colleagues register their bank accounts at a family member’s address to get around the issues – which is ridiculous and isn’t necessarily an option for everyone.
The credit agencies Equifax and Experian couldn’t help me, and neither could the Financial Ombudsman service. How can I get around these problems?
Mortgage help: Our column sees broker David Hollingworth answering your questions
David Hollingworth replies: The frustration you’ve felt in this process comes across loud and clear. It should be easier for those that are working for the British forces or government overseas to be able to access the same service that residents would expect.
The issues you face appear to have been about meeting the required credit score.
Periods abroad can leave holes in a credit history and make it harder for a lender to get a clear picture of what your credit arrangements look like.
This will feed through into a lender’s credit score. Getting a mortgage offer depends on lots of data points – but if the score doesn’t hit a lender’s required threshold then an application could be declined.
Lenders should be able to accept BFPO addresses without any problem, but linking that up with your credit file can prove problematic.
If lenders can’t see the complete credit history on your file from a credit reference agency such as Equifax or Experian, there’s clearly a stronger chance that you won’t be able to meet the necessary score and requirements.
I spoke to John Webb, head of consumer affairs at Experian to get the expert take.
He explained that in the past, BFPO addresses created difficulties in linking someone’s address and credit history to their credit file.
That has been improved since the Royal Mail issued all BFPO addresses with a special postcode in 2012.
This means every BFPO location has its own UK-style postcode, starting with for example BF1 or BF2.
However, for the system to work that postcode must be used on any new credit applications, and any existing lenders pre-2012 would also need to be updated with those postcodes and addresses.
Webb agreed with your point about registering to vote as a crown servant, as this doesn’t show on credit reports – unlike those registered on the electoral roll in the UK.
You can register to vote at a BFPO address, but that would need to be tied to a UK address. From what you say this would therefore not be possible for you.
A possible solution
Webb’s tip to try and overcome some of these problems was to issue a Notice of Correction statement to your credit report. This is a 200-word, factual statement written by you which lenders will see when they access your report.
You will need to contact each of the credit agencies, Experian, Equifax and Transunion, to arrange this.
Your statement could help to explain your circumstances, and might encourage lenders to verify your identity, rather than making an instant decision to refuse you.
I would add that different lenders will have different approaches to mortgage applications, and this is where a mortgage broker should be able to help.
They would be able to discuss the issues caused by the gaps in your credit file and the period overseas with lenders upfront, to better understand what additional information may be required to fill gaps and help avoid being declined.
Some lenders may be a little ‘computer says no,’ and if the score isn’t adequate to pass the decision in principle requirements it may be a struggle to overturn that decision.
Others however are more willing to review applications on case by case basis, and consider other information to provide an explanation for a lower score if everything else stacks up.
One lender I spoke to said that if a low score is arrived at because of a BFPO address, they will refer it for review with an underwriter. That could give you and your broker the opportunity to explain the circumstances.
Another lender said that BFPO addresses can be hard to trace, but was also upbeat that many cases are still approved.
A further tip was to go back further with address history than the forms you fill out require – for example, adding ten years where you are only asked for six. That may help a lender get a trace on you, and could just be enough to help meet the necessary score.
Depending on where you were living and whether you had any credit agreements overseas, some lenders may be able to conduct a credit check in that country too. That could add to any existing history and provide a boost to the score.
Overall, the situation is not straightforward and there can be challenges for those serving overseas. As you say many will therefore register their accounts and credit at a family member’s address. Although that’s a pragmatic approach, I agree that it shouldn’t be necessary.
Working with a mortgage adviser to build the picture of your case and allow them to present your history and an explanation of your circumstances could help to find a more approachable lender.
