You can get a mortgage, even with bad credit in the UK. The important thing is to understand the process so that you know what to expect. Here are some tips to help you.
Read Your Credit Report
A mortgage lender will want to see your credit score. Therefore, it’s important before you apply for a mortgage to read it yourself.
You can get your credit report free of charge. Go into the web site of Experian, Equifax and Callcredit. You can see your report online. It is best to get the reports from all three because each one has different criteria for calculating your credit score.
Once you’ve got the report make sure the information it’s got about you is correct. If you think something is wrong, you need to write to the credit agency.
Look out for joint credit with an ex-partner of flat mate. Their details will remain on your file. If their credit rating is poor it will affect your rating too. If you don’t share any finances now check to see any joint accounts are closed and then let the credit agencies know.
Improve Your Score
Your credit score will take time to improve, so the sooner you start the better. If you have a poor score because you don’t have any credit, then get some. The best thing to do is to get a credit card with a small credit limit. Use it to pay something you buy regularly, such as petrol or food.
Then pay it off at the end of every month. Don’t be tempted to spend your entire credit limit as this won’t improve the score. Another thing you can do is put your name on the voting register.
If you rent a property, consider asking your landlord to join the Credit Ladder scheme.
You pay your rent to Credit Ladder and they pay your landlord. At the same time, they tell credit agency Experian that the rent is paid. The monthly payments are recorded on your credit file with Experian. If you pay on time and don’t miss any payments your credit score improves over time.
Consult a Specialist
A High Street Bank or Building Society is unlikely to lend you the money for a home with bad credit. You should be careful applying online too. These applications stay on your credit file. Anyone who reads it will see that you are applying for credit with multiple lenders. This doesn’t look good especially if credit is refused.
What you need is a specialist company who deal with bad credit mortgages. A mortgage broker will be able to help you. You will have to pay them a reasonable fee. But, they know where to look and what paperwork you’ll need to organise.
As you can see a mortgage with bad credit in the UK is a possibility. You just need a mortgage broker to help you.