Can I obtain a mortgage if I have a poor credit history?

Have you ever had a late payment on your mortgage or any credit commitment? Have you been in a debt management plan, been discharged from bankruptcy, had defaults, Count Court Judgements (CCJ) or an Individual Voluntary Agreement (IVA)?

A poor credit history does not mean you cannot get a mortgage. It is a misconception that you need to have perfect credit score as there are many mortgage lenders with thousands of products to choose from.

The first step is to obtain a copy of your credit report. Most lenders use Equifax and Experian Credit agencies to see your current and historical credit status. These credit agencies will normally allow you to have a month’s free trial, therefore it shouldn’t cost you anything to do this. Your credit report will allow you to see exactly the detail a mortgage lender will see when they carry out their credit checks.

The next step is to speak to an independent mortgage adviser and they will also look at your credit report before approaching a lender. The adviser will know what will qualify as bad credit and what doesn’t. In addition, they can conduct some initial enquiries with the lender before carrying out a credit search to see if it is something they would consider. You will want to avoid having too many credit searches carried out because every time a lender does a credit search it will leave a footprint on your credit history and  reduce your credit score.

Your mortgage adviser will also know what to emphasise to the lender, for example, explaining the situation that caused the bad credit such as a relationship breakdown, ill health or loss of employment and why it is unlikely to occur again in the future.

To improve your credit rating;

  • Reduce and pay off outstanding loans and debts
  • Close any dormant accounts
  • Make sure all accounts and ID is registered at your current residential address and also ensure you are registered on the Electoral Roll.

Lastly, try to maintain a steady income and save the largest deposit you can, as the bigger the deposit, the more competitive rate you will potentially be able to secure.

If you need a new mortgage or are investing in property then speak to Hoyl Mortgages. Call Watsons on 01603 619916 and we will arrange for you to have a free initial consultation with one of their Buy-to-Let specialists.



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