Bad Credit Mortgages

Can you get a mortgage with bad credit?

Whilst the options available to you may be more limited, we do our utmost to ensure that you can get a mortgage with bad credit. Our experienced mortgage brokers, based throughout Kent, London and Edinburgh, will discuss your situation to ascertain the best approach to take. They can advise you on various ways to improve your credit rating before submitting your application. When you’re ready to proceed, the details of your adverse credit history will determine which lenders they approach on your behalf.

Specialist lenders don’t always advertise their mortgage deals to the general public. Using our services, however, you can rest assured that you’ll be offered all of the deals applicable to your case. Just give us a call on 01322 907 000 to discuss your situation with our expert financial advisers. If you prefer, send an email to us at info@trinityfinance.co.uk or an enquiry via our contact form. Include brief details of your circumstances and one of our bad credit specialists will reply to you as quickly as possible. Whether you’re looking for a new mortgage or want to remortgage with bad credit, we will help you throughout the process to ensure that your application is successful and everything runs smoothly.

What causes you to have a bad credit rating?

If you’ve already tried to get a mortgage yourself rather than using a broker to help you, you’ll understand that having a bad credit rating makes this hard. If lenders have difficulty checking your identity, credit history or ability to manage your finances, this negatively affects your chances of being offered a mortgage. But what has caused your credit score to drop in the first place? Your credit rating is affected by numerous factors and the ones that have a detrimental effect on your score include:

• Not being registered on the electoral roll
• Having the wrong address detailed on your credit report
• Being linked to someone else with a poor credit history on your report
• The inability to manage your bank account effectively
• The overuse of credit facilities
• A lack of credit history
• Late, missed or defaulted payments
• Using payday loans
• Multiple applications for credit
• Declaring bankruptcy
• Having county court judgments (CCJs)
• Entering into an individual voluntary arrangement (IVA)
• Agreeing to a debt management plan (DMP)

Late or missed payments are common reasons for a good credit score to turn into a bad one. Several missed payments can result in a default. If your financial situation results in a case going to court, a county court judgment (CCJ) may be filed against you. Sometimes, you may already have taken action to try and rectify some of your debt. You may have entered into an individual voluntary arrangement (IVA) or a debt management plan (DMP), for example. Unfortunately, these negatively affect your credit score, as does a bankruptcy declaration.

Don’t approach lenders yourself

We strongly advise that you don’t submit applications yourself to multiple lenders in the hope of being accepted by one. This is because doing so does more harm than good — it negatively affects your credit score. Each time an application is made, it is recorded on your credit file and can be viewed by other lenders. Numerous applications will look as though you’re struggling to be approved by a lender. Instead of improving your chances by applying to several lenders, you’ll actually decrease your chances of being approved for a mortgage.

Our mortgage brokers will carefully check your circumstances and each lender’s criteria. They will then present your application to the lender best suited to dealing with your situation. That way, the credit checks carried out on you are minimised and you’re in a better position to be offered a mortgage.

How to check your credit rating

It’s essential for lenders to check your credit rating when you apply for a mortgage. This is because they have to ascertain that you pay your bills when they’re due. A bad credit score implies that you don’t and you are then considered to be a high risk. Now that you know our mortgage brokers can successfully arrange bad credit mortgages, there’s nothing to stop you from applying.

Before you do, though, you should check your credit score. That way, our brokers know your position from the start. They can look at ways that you may be able to improve the score before submitting your application. You may be worried about checking your credit score but it’s easy to do and your score might not be as bad as you expect.

Contact the credit reference agencies

The best solution is to check your credit report with each of the UK’s top credit reference agencies — Equifax, TransUnion and Experian. Every company you have a financial connection with, such as your bank, credit card companies and phone provider, shares your information with these credit reference agencies. That can include the amount of debt you may have and how promptly you make payments for your bills, among other factors.

Other data is collated by the credit reference agencies. This includes CCJs and records of bankruptcy as well as electoral roll information. These are all amalgamated into your credit file and a credit score is provided for you. This is what lenders use as a guide to determine if they will lend you any money. If they do, there may be conditions to the loan, such as a higher interest rate. It’s important to obtain a credit report from each of the three main credit reference agencies. This is because each one collects different data on you.

Ways to increase your credit rating

Once you’ve obtained your credit report copies, don’t be disheartened if they reflect a low credit rating or even a lack of one. Different factors impact your credit file in different ways. For example, a missed payment for your mobile phone bill isn’t considered as serious as a missed mortgage payment. Even if you haven’t been in debt before, you can still have an unhealthy credit score. Why? Because if you hardly ever use credit, there is nothing to reflect your ability at managing finances.

Any event that has resulted in adverse credit is deleted from your credit file after 6 years. There are ways to increase your credit rating in the shorter term, however, which we’ve detailed below.

Register on the electoral roll

This is a good place to start and is an easy way to increase your credit score. By being on the electoral roll, a lender can confirm your name and address.

Check the information on your credit report

It’s important to check that the information detailed on each credit report is accurate. If not, you need to contact the credit reference agencies and ask them to either amend or delete the information.

If an instance of bad credit was beyond your control, you need to provide the credit reference agencies with information about this. For example, a late payment of your salary by your employer may have resulted in the missed payment of a bill. In this case, an explanation can be included in your credit file to this effect. This is called a Notice of Correction. Whilst the information will remain on your record, the explanation may help with credit applications in the future.

Remove financial links to others with bad credit

Ensure that there are no links on your credit report to anyone else with a bad credit rating. For example, you may have lived with someone who had a history of bad credit but they no longer live with you. You need to make sure that the previous financial association with them no longer applies to your credit file. Therefore, the link to their name needs to be removed from your credit report by the credit reference agencies.

Pay your bills on time

Doing so shows lenders that you have good habits when it comes to your finances. Also, try to keep your credit card balances as low as possible for the same reason.

Control your spending

Stop paying for unnecessary items. For example, consider whether you really need the home shopping accounts you have or whether you use the gym regularly enough to warrant the membership fees you’re paying. For items or services that are necessary, it’s essential to pay those bills on time.

Avoid applying for credit

Every time you apply for credit, a new credit check will be conducted on you. To a lender, this looks as though you cannot adequately manage your finances.

Refrain from getting into more debt

Whilst it can be tempting to use a new loan to try and clear some existing debts, it’s important that you don’t rack up even more debt. Taking out a payday loan is an example of this and it will only harm your credit score even more. A lender will view this as evidence that you cannot handle your finances adequately.

What types of bad credit history are considered for a mortgage?

Lenders vary in their criteria when offering mortgages with bad credit. They consider the type of credit issue, when it occurred and the reasons behind it. Not all credit issues are viewed in the same way so it really depends on the flexibility of the individual lender. For example, a missed utility bill payment isn’t considered as serious as a missed mortgage payment. A missed telephone bill payment isn’t considered as serious as 6 months of missed payments. Some poor credit mortgage lenders are happy to lend based on missed payments while others consider CCJs and some accept applications from those who’ve previously declared bankruptcy.

At Trinity Finance, we work with both mainstream and specialist lenders offering bad credit mortgages. We know which ones are more understanding when it comes to an applicant with bad credit. Depending on your circumstances, our mortgage brokers can ascertain which lender to approach on your behalf. This prevents multiple mortgage applications from having to be made, which helps to protect your credit score. It also increases your chances of being offered a bad credit mortgage loan.

The advantages and disadvantages of a bad credit mortgage

If you’re unsure as to whether you should apply for a bad credit mortgage or not, weigh up the advantages and disadvantages detailed below. Our specialist mortgage brokers for bad credit are also on hand to discuss your concerns and help you make the right decision.

Advantages

• You can own a home sooner rather than later. Rather than waiting until your credit issues have been resolved, you can get on the property ladder straight away.
• Your credit score will start to increase. As you make your monthly mortgage repayments, your credit score will improve. In time, you’ll be able to remortgage to a better deal.
• There’s still a choice of mortgage deals. Although there are fewer mortgage options to choose from when you have bad credit, there are more deals available when your credit issues are minor ones. Our mortgage brokers also have access to deals that are only available through brokers so you’ll benefit from a wider selection.
• You can take advantage of the current prices. By purchasing a property now, you’re not risking having to pay a higher price should the market gain momentum in the future.

Disadvantages

• You have to pay a bigger deposit. Lenders require you to pay a larger deposit than would be needed if you had a good credit history. This is because your bad credit status poses more of a risk for them.
• You’ll be charged a higher interest rate. Just like having to pay a bigger deposit, you’ll be charged a higher interest rate by the lender. This helps to counteract the risk they’re taking by offering you a bad credit mortgage. As there aren’t as many bad credit mortgage deals compared with standard ones, the rates also aren’t as competitive.
• There’s a limited choice of mortgage deals. The range of deals you can choose from is smaller due to your bad credit status.
• There’s no time to increase your credit score. If you want to buy a property straight away, there’s no opportunity to build up your credit score. If you’re able to wait, however, you can improve your score and benefit from better mortgage deals as a result.

We can help you apply for a bad credit mortgage

We understand how hard and demoralising it can be to find a mortgage when you have a poor credit rating. Whilst it is challenging, it is possible and we are here to help you with that. There’s certainly no need to go it alone when trying to secure a mortgage with bad credit. With years of experience and working with numerous lenders, our mortgage brokers can take the stress out of the application process for you. They are highly experienced in arranging poor credit mortgages and can look at various ways to strengthen your application. When you’re ready to proceed, they’ll present your application to the best mortgage lender for bad credit to suit your situation.

As one of the leading mortgage brokers in Kent and with mortgage advisers located throughout London and Edinburgh, we have many resources at our fingertips to help secure a mortgage for you. Simply reach out to our specialist mortgage brokers for bad credit on 01322 907 000 and let us take care of the rest.

Our expert brokers are available to discuss your concerns and review your circumstances. They can offer advice on how to improve your credit score and compare your credit issues against different lenders’ criteria. With access to broker-only mortgage deals, you can rest assured that you’ll benefit from the best deals available. If it’s out of office hours, just send us an email at info@trinityfinance.co.uk or an enquiry via our contact form. We’ll reply to you as quickly as possible with further bad credit mortgage information.