A parking fine for £60. Plenty of people would rather fight it than pay it, and plenty feel they have the moral high ground. A mortgage broker says that stand can cost thousands.
Jamie Elvin, director of London-based Strive Mortgages, which specialises in mortgages for the self-employed and sole traders, said borrowers rarely link the two. “People simply don’t join the dots when they are taking a stand over a small fine or unpaid debt,” he said. “They don’t understand how quickly, if left unresolved, it can impact their mortgage.”
The danger is greatest when a disputed parking penalty or mobile phone bill grows into a County Court Judgement, or CCJ, or a default on the credit file.
“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,” Elvin said.
Lenders, he said, do not care who was right. “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.”
Pay first, argue later
His advice is blunt. Pay the bill or fine you dispute, then challenge it and try to get the money back. “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.”
The unopened mail problem
Elvin named a second, quieter cause of trouble: people who move house and never update their address. He said it is widely recommended to redirect mail for six months or even a year.
“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,” he said. Many only find out when they try to remortgage and see the CCJ on their credit file.
Even if the judgement does not block a purchase or remortgage, he added, it often means paying more, because only specialist lenders rather than high street banks will lend.
