It’s been a while since I have written about bad credit, but we seem to have had so many calls recently about this subject that I thought it was something I should address:
More and more lenders are agreeing to cases where customers have had blips on their credit profile. The main questions are, How big was the blip? How many blips do you have? and How long ago was the blip?!
Customers running into trouble with a mobile phone provider can often find themselves blacklisted and therefore unable to get a mortgage. Sensibly a lot of the High Street lenders now ignore one off blips with communications companies so they can get on with processing your mortgage while you let loose at your phone provider!
If the blip is more significant than one missed payment with Vodafone, you are unlikely to pass a credit score with a high street lender. A credit score is the lender’s (secret) internal score card for each applicant and defaults on loans and county court judgements will bring this score below the minimum level to qualify. Thankfully, some lenders have no such thing as a credit score, instead each application is given the once over by an underwriter, rather than a computer, to see if it’s a sensible risk for the lender to take on.
No providers are interested in serial offenders, but they will look favourably on “one off events” wherever plausible.
This means that clients with (on paper) terrible credit, can in some cases now get a mortgage. We have a client Mr X who went through a terrible divorce which resulted in 3 CCJs, some mortgage arrears and a default 2 years ago. Prior to this event he had impeccable credit and once the divorce was settled, there were no further problems. This client got an 85% poor credit mortgage at a reasonable rate.
Then take the case of Mrs Y who gave up work to become a full time Carer for her mother for 5 years. The credit register is littered with defaults and late payments for this period and clearly reflects the struggle the family had with money. Despite the amount of adverse credit, when she returned to work, we managed to secure a mortgage which also paid off a couple of credit cards which were spiralling out of control.
The moral of this story, is to keep your credit clean where possible, but if you do his a blip –all is not lost!
To speak to a mortgage adviser, contact us on 01628 507477.
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