Perhaps unsurprisingly, if you have a bad credit history you will find it harder to get a mortgage on competitive terms.

The reasons are obvious. Mortgage lenders are prepared to accept a lower return on their money if they are lending to a ‘good bet’. Someone that’s borrowed money before or has kept to previous financial commitments such as home electricity bills, mobile phone contracts, etc.

Every time you make a late payment on these things it can count against your credit score. If you are taken to court for non-payment and a County Court Judgment (CCJ) is made against you then that too will damage your credit score.

But it’s not just poor money management that can come back to haunt you. Gaps in the electoral roll (perhaps when you were working abroad or living with family) can adversely affect your credit score as can your age, employment history and other aspects of your life that might seem to have little to do with obtaining a mortgage. Even regularly applying for credit can have an effect on your credit score.

The good news is that even with a bad credit score (perhaps you’ve previously had an IVA or DMP) it is still possible to obtain a mortgage. Unfortunately, because of the perceived extra risk, you may find that you have to put down a larger deposit than might otherwise have been required. It’s also likely that a lender will want to charge you a higher rate of interest to make up for the added risk of you failing to keep up your repayments.

Every mortgage lender has their own credit scoring system which is not published, so finding out your credit score online may not necessarily help. But if you feel you may have bad credit, you should obtain a copy of your credit report which will show all your credit, good and bad. You can get this for free online from companies such as Experian or Equifax.

It’s important that when you apply for a mortgage, you apply to lenders that are likely to meet your borrowing criteria and also who are likely to accept you as a borrower. For example, some lenders don’t cater to the self-employed. Others specialise in this field.

The bad news here is that each time you apply for credit and/or have it refused, you are damaging your credit score! The good news is that here at Mortgage Required, our specialist poor credit mortgage advisers can quickly select the best lender for your needs and enhance your chances of receiving a mortgage offer that will suit your circumstances.

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