Whilst a stable employment history, good salary and large deposit are all good starting points when applying for a mortgage, your application is still likely to be refused by many lenders if you have a poor credit rating.
A bad credit rating might include a County Court Judgement (CCJ) against your name or previous defaults on debt repayments. If you have been bankrupt in the past then this will also be included on your credit history and is likely to be detrimental to a successful mortgage application.
Of course, there are sometimes exceptions and several lenders specialise in what are generally acknowledged to be higher risk loans to applicants with a poor history of debt default, bankruptcy or CCJs. Unfortunately, the reasons behind your bad credit history are generally of little consequence to the lender and whilst this might sometimes be unfair, it is likely that if you have a poor credit rating your options for borrowing will be limited and the cost of borrowing will be more expensive.
If you have a poor credit rating you may be required to find a larger deposit than otherwise and pay a higher interest rate than would otherwise be the case.
To check your credit rating various third parties will undertake a check on your behalf. You can check your own, free of charge at www.noddle.co.uk, which we would always advise everyone to do before they consider their mortgage options.
Simple ways to improve your credit score include making sure that you are registered on the electoral roll and that you don’t miss credit card or loan repayments.
The good news is that more and more lenders are coming back into the “adverse” market and rates are definitely becoming more competitive.
You may also find our Blog article of interest; 'How to Improve Your Credit Score'.
For more information or to speak to a mortgage adviser contact us on 01628 507477.
Download our Free First Time Buyers Guide
Recent posts
Budgeting over the Christmas Period
4 days ago
The most wonderful time of the year can easily turn into the most expensive time of the year. Watching the pennies doesn’t mean that the Christmas festivities have to stop, following a few budgeting tips can mean you still have a special Christmas and don’t go into the new year in debt.
Preparing your home to sell in winter
8 days ago
December is usually a less desirable time to buy as many people don’t want to move over the holidays. However, prospective buyers do start to look at this time. Selling your home in winter may require a bit of extra attention to showcase your property at its best.
We look at why mortgage rates increased following the Bank of England's choice to reduce the bank rate, and should you fix now?
UK 2024 Autumn Budget: Housing
30 Oct 2024
On 30th October 2024 the Chancellor, Rachel Reeves delivered the Autumn budget which we had previously been warned would be “difficult”. Below we have summarised the main housing points.
Talking about money with kids
23 Oct 2024
In an increasingly cashless society, money is an intangible concept for children to grasp. In the days of coins and notes, kids could see money as something physical you require to purchase goods and services.
In order to help teach your children about money, we have listed some tips below;
Labour Autumn Budget Predictions: Housing
18 Oct 2024
The UK’s chancellor, Rachel Reeves will deliver the Labour government’s autumn budget at the end of the month, we take a look at what could be announced in relation to housing.
Recent research from Halifax has revealed the most sought-after locations for first time buyers in Britain.
The data which was taken from the Halifax House Price Index looked at areas outside of London where those looking to purchase their first property were buying. Despite high property prices and increased rates, these first time buyer hotspots have remained popular.
How can I look after my mental health?
7 Oct 2024
Taking care of your mental health means looking after your emotional, psychological, and social wellbeing. There are several ways we can practice self-care that will help to improve our physical and mental health. This can help to reduce our risk of illness, manage stress, and boost our energy levels!
More information
Trusted by
