Getting a mortgage with a bad credit history is possible.
If you’re looking for a mortgage and know that you have a particularly damaging credit score that involves CCJs, IVAs or bankruptcy, don't panic.
Whilst it requires a little more work, it’s certainly possible to get a mortgage if you have a tarnished credit report.
Get everything in order…
The first thing you need to do is actually have a look at your credit file.
Different credit agencies use different scoring systems and what might show on one may not show on another so it’s also worth checking more than one of the main three that are Experian, Equifax and Call Credit.
Don’t keep searching for yourself…
The worst thing you can do is make numerous applications in a short period of time because you get declined.
If you don’t use a broker and choose to go straight to a high street bank, they will likely just want to credit score you as quickly as possible, regardless of your history, meaning they will apply to lenders that would never accept you, damaging your credit score even further.
Use a broker…
It’s imperative that you use a mortgage broker that has access to a wide panel of lenders that gives you the best chance of finding one that will look at adverse mortgages.
Every case is different, and a good mortgage adviser will make things clear to you before proceeding with any applications.
You might need a bigger deposit…
If you’ve got poor credit, then you’ll be seen as a higher risk by the lender. To combat this, you could put down a bigger deposit so that the lender doesn’t have to lend you as much. If you have credit issues preventing you from mortgaging at a specific loan-to-value (LTV).
Be wary of costs…
The number of lenders that will be willing to look at your application is lower than if you had a clean credit history.
Because of this, fees and rate that you pay may be higher as you’re perceived as a higher risk.
Don’t let this put you off, though. Rates are still highly competitive.
If you’re thinking about getting a mortgage but are concerned that your bad credit history is going to hinder your chances, contact one of our mortgage advisers and they will be happy to help.