Bad Credit Mortgages

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Bad Credit Mortgages – Better Financial Services

We take a look at what bad credit is, how to get a mortgage with bad credit, and the importance of checking your credit report.

What is bad credit?

You will have bad credit if you don’t have a good record of debts. For example, late payments on your credit report, if you’ve used payday loans in the past, if you’re on a debt management plan, and if you’ve had a repossession or bankruptcy.

This will also be the same if you’ve had an Individual Voluntary Arrangement (IVA) or trust deed. If you’ve got a debt relief disorder, if you’ve been in arrears, or have a County Court Judgment (CCJ) or default.

All of the information recorded above will show that you’ve had problems with lending, and borrowing in the past and unfortunately give you bad credit or adverse credit. You will often hear these terms used interchangeably.

How do I know if I’ve got bad credit?

The most effective way to find out if you have bad credit is to do a credit search. There’s a lot of different agencies online that you can use to do this. The three main ones include Experian, Equifax, and Call Credit. Others also get information from Credit Karma and places like that.

You can easily search online on one of these credit reference agencies and they will give you information about your credit score. You will receive what is known as a ‘credit report’.

If you think you’ve got bad credit, we highly recommend getting a credit report. Always acquire one before giving us a call, and then we’ll know what we’re talking about. We have a link on our website called, Check My File.

This is slightly different from the others. Check My File compiles information from Equifax, Experian, and Call Credit and gives you the findings in one report. Looking at all three is useful because sometimes you find that you may have a CCJ that appears on Equifax but doesn’t appear on Experian.

We would strongly recommend to anyone who is thinking of getting a mortgage, now or even shortly, to check their credit report. Sometimes mistakes can be found that need to be corrected. Please note, the link on our website is free for the first 30 days. If you don’t cancel after this period, you will get charged.

Can I get a mortgage with bad credit?

The short answer is yes. It’s possible to get a mortgage with bad credit. We have access to about 90 different lenders. It’s also important to be aware that many of the high street banks are not so lenient with bad credit.

There are, however, a lot of building societies that are more flexible when it comes to the criteria. We even have lenders who don’t use a credit score. They instead look at your credit file and make a decision based on that. Therefore, all the decisions are made by a human being.

All in all, getting a mortgage with bad credit depends on your circumstances. It depends on how bad the credit is and how long ago it was. The more historic it is, the better it is for you.

How can I get a mortgage with bad credit?

As stated previously, the first step to take would be to check your credit score. Know what you’re working with, know how bad or how good your credit is. Once this has been checked, the next step would be to give us a call, rather than calling 20 or 30 different lenders to enquire if you can borrow.

We would normally ask you to send in the credit report and that’s free of charge. We work with bad credit all the time and we have very good relationships with certain lenders. We’ve even negotiated bespoke products for people in the past. The reason for this is because they’ve not met the risk criteria, so we made products specifically for them.

Can I get a mortgage with a credit score of 500 or less?

The answer to that is yes, it all depends. As mentioned previously, there are several lenders out there who do not look at your credit score. They work with different criteria. For example, if you have a CCJ, it has to have been over a year ago, or it has to be less than a certain amount.

It doesn’t matter what your credit score is, but it’s best to give your chosen mortgage broker a call to find out what your chances are.

Tips to consider:

  • Every case is so individual, so give it time
  • If your bad credit is very recent, it can make it difficult to get a mortgage
  • If you’re married, consider your level of debts and your partner’s debts
  • The fewer debts the better
  • Prepare your credit history, check for any mistakes, and get these corrected
  • Present a lower risk
  • Be honest with us
  • Have an explanation

Building societies will look at the risk as a whole. The lower your loan to value, the better chance you have of getting a mortgage.

If you have very bad credit, it can be difficult to get a 90% loan to value product. Or, 95% and even 85%. If those, for example, are 70 or 75%, lenders will be more likely to look at it because it presents a lower risk.

If you’ve been Self-Employed for one or two years that presents a high risk. However, if you’re employed, you’ve passed probation and you get a steady income that presents a lower risk. Remember, we work for you, not the lender. Please don’t be dishonest, because the lender will only find out later down the line and this could jeopardise your whole application.

Lastly, have a valid explanation. Certain lenders will take into consideration if you’ve been through a period of bad credit due to a life event. For example, a divorce, bereavement, health crisis, or something happened that caused you to fall back on payments, caused you to go into default or a CCJ.

There are always options available to you

We’ve worked with several people who’ve had very bad credit. Sometimes the cases are difficult but we always do our best to search and negotiate to deliver the most suitable outcome possible. If it’s well packaged and it presents a low risk, the lender is quite likely to consider it. It’s certainly not all doom and gloom!

Even if it proves impossible to get you a mortgage at first glance, we can tell you what to do to get you there. Then in six months to a year, you’ll be in a much better position to buy your new home.

To clarify, how can a mortgage broker help?

You need to find a specialist mortgage broker and one who particularly works with bad credit.

You will find some mortgage brokers don’t particularly like working with bad credit. You also want to find a mortgage broker that has a bigger pedestal and one that is whole of market and has a lot of lenders, like ourselves.

We understand the lender’s requirements. We have direct lines to business development managers and underwriters that we can speak to. You don’t have to do any of that. We have different tools and different software available that make searches and filter-out certain information based on your circumstances. We can get the process done much quicker for you.

Bad Credit Mortgages
Bad Credit Mortgages


Bad Credit Mortgages

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