Many aspiring homeowners can still access a mortgage with bad credit. Some lenders will give you a mortgage despite your bad credit by considering your overall circumstances beyond your credit rating.
How to apply for a bad credit mortgage?
Applying for a mortgage with bad credit is the same process as applying for any mortgage. The applicant(s) must make the application without concealing information, and the lender will then make a decision based on your credit rating and other factors.
However, to improve your chances of being accepted with bad credit history, there are steps you can take:
- Make time between events that reduced your credit rating and making an application. The more time that passes, the less impact they usually have on lender decisions.
- Apply with a stable income and a bigger deposit.
- Take steps to improve your credit score and clear existing debts.
You may also want to apply to lenders with a history of approving mortgages to people with bad credit history. We can assist with locating these lenders.
How much will a bad credit mortgage cost?
If you have bad credit, the lender may approve your mortgage application, but you may have to pay back more over time. Your offer may include a higher rate of interest because the lender wants to offset the risk that you might default on mortgage repayments.
People with bad credit may also need to pay a bigger deposit to secure a mortgage, compared to those with a good or excellent credit rating.
What are the most common causes of bad credit?
The most common causes of bad credit are unpaid debts, typically to utility companies, mobile phone providers or creditors such as payday loan lenders and credit cards from banks.
Missing a single payment will not cause a significantly poor credit rating if you manage to catch up quickly. However, if you have defaulted and been taken to court and issued with a CCJ for unpaid debts, this can cause bad credit.
Any instance of defaulted payments or CCJs will remain on your credit report for six years before being automatically deleted.
Checking credit reports
You can check your credit report by using a credit reference agency website. Many credit reference agencies offer free trials so you can access your report for free for so many days. You are encouraged to check your credit report before applying for a mortgage.
You may be able to identify reporting errors and have them removed to improve your credit score. Around one in five people are estimated to have a mistake on their credit file. Removing reporting mistakes is one of the few ways to increase your credit score quickly.
How to improve your credit score
Having errors removed is one way to instantly improve your credit score, but there are many others. You can also:
- Register on the electoral register
- Pay off existing debts
- Budget so you don’t create new debt
- Continue to borrow responsibly without utilising all available credit given to you
- Limit bank and saving account applications
We can provide helpful information on how to improve your credit score before considering a mortgage with poor credit.
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FAQ'S
We offer a free no-obligation initial consultation, which will allow us to identify your financial planning needs and to determine what services are most suitable for you.
On this meeting, we will provide you with and discuss our Terms of Business brochure. This document clearly details our fees for all areas of advice we provide. We understand individuals’ have different needs and objectives and after our consultation we will be able to confirm our fees. At no point will any chargeable work be undertaken until you are made aware of any associated fees. We are always happy to answer any questions about how and when our fees are payable, however we may not be able to confirm the exact fee until we have completed an initial consultation.
Yes, of course. We welcome the opportunity for you to invite family or a third-party representative to come along to our meetings if you would like the presence of a familiar face. We endeavour to support you, so please make us aware of any additional requirements or provision you require prior to our meeting.
We can meet face to face at our offices in Bexley. Our address is Unit 34 The Hop Store, Old Bexley Business Park, 19 Bourne Road, Bexley, Kent, DA5 1LR.
We can also facilitate home meetings if required, or video and phone calls if this is more convenient for you
We provide a range of advice services, including mortgages & protection, investments, financial planning, retirement planning, and estate planning. If you wish to discuss your enquiry further, please feel free to call the team on 01322 958222.
Yes, Sidney Curtis Financial Limited is an appointed representative of Quilter Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) and is registered on the FCA register with Firm Reference Number 440703. Sidney Curtis Financial Limited is also registered on the FCA Register with Firm Reference Number 1052400.
We offer a free no-obligation initial consultation, which will allow us to identify your financial planning needs and to determine what services are most suitable for you.
On this meeting, we will provide you with and discuss our Terms of Business brochure. This document clearly details our fees for all areas of advice we provide. We understand individuals’ have different needs and objectives and after our consultation we will be able to confirm our fees. At no point will any chargeable work be undertaken until you are made aware of any associated fees. We are always happy to answer any questions about how and when our fees are payable, however we may not be able to confirm the exact fee until we have completed an initial consultation.
Yes, of course. We welcome the opportunity for you to invite family or a third-party representative to come along to our meetings if you would like the presence of a familiar face. We endeavour to support you, so please make us aware of any additional requirements or provision you require prior to our meeting.
We can meet face to face at our offices in Bexley. Our address is Unit 34 The Hop Store, Old Bexley Business Park, 19 Bourne Road, Bexley, Kent, DA5 1LR.
We can also facilitate home meetings if required, or video and phone calls if this is more convenient for you
We provide a range of advice services, including mortgages & protection, investments, financial planning, retirement planning, and estate planning. If you wish to discuss your enquiry further, please feel free to call the team on 01322 958222.
Yes, Sidney Curtis Financial Limited is an appointed representative of Quilter Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) and is registered on the FCA register with Firm Reference Number 440703. Sidney Curtis Financial Limited is also registered on the FCA Register with Firm Reference Number 1052400.