Fox Davidson have been shown a letter from a customer that tells them their Ltd company or ‘commercial mortgage’ held in a separate legal entity will now appear on their personal credit report.

Commercial Mortgage Data To Be Reported To Experian And Equifax

The letter, which was sent out by Shawbrook Bank to its customers and dated June 2022 states “Following a review of how we report our customers data to credit reference agencies, we have identified that we have been providing incomplete data to them in some instances”. The letter goes on to say, “From 31st July 2022, we will begin reporting data on all parties to the mortgage to credit reference agencies Experian and Equifax”.

The following line in the letter suggests that clients may see a change in their credit report. “You may notice a change to your credit report which will now show that you have a mortgage with Shawbrook Bank. Your credit report will also show whether your account is up to date or if any payments have been missed or if you are in a payment arrangement with us”.

The letter is signed by John Barker, Chief Operating Officer, Shawbrook Bank.

How Will This Affect People?

The immediate questions that come to mind are why? What effect will this have for customers? Will the full debt be recorded, or just the personal guarantee (PG) element? How will this affect borrowers applying for main residence mortgages?


Is there some legislation that states that corporate debt now needs to show on client’s personal credit reports? We checked and couldn’t find any, so maybe this was an internal bank decision. We asked our contact at the bank and they had only found out about it from a broker on the same day that we found out about it. 

What effect will this have for customers?

A Ltd company is a business. It is a separate legal entity and should be treated as such. It is treated differently legally and taxed differently to an individual. Therefore, the two entities should be kept separate when it comes to banking and credit. 

Customers of Shawbrook will have complications when applying for loans and mortgages. You should not declare a Ltd company mortgage as a personal liability, but now lenders will be picking up the debt. Some lenders may decline mortgage/loan applications for non-disclosure. Some mortgage lenders work off maximum exposure limits and will now have to do more manual underwriting to distinguish what is a personal buy-to-let and a corporate buy-to-let. This has no positive for the customer whatsoever. 

But I only provided a PG for 25% of the loan?

A corporate mortgage is debt owed by the company. That debt is secured by a 1st charge on the property, a personal guarantee and sometimes a debenture against the company. As a shareholder of the company, an individual is usually only responsible for a percentage of the debt. In Shawbrook’s case, it is 25%. Therefore, will Shawbrook only be reporting 25% of the total debt on the clients credit report, for that is all that they are personally liable for?

Final Thoughts

We don’t know the reasoning behind the decision, and even if we did, we still think it is a strange one. One that will create a headache not only for their customers, but also for other lenders who will now have to pick apart credit reports to determine what is a personal mortgage and what is a corporate mortgage.

This decision goes against the whole concept of setting up a (separate) business to run your residential and commercial property portfolio.