Getting a Mortgage with a Poor Credit Score
It’s easier when you speak to one of our advisors
It's not impossible to get a mortgage with a poor credit score
We understand that life doesn’t always go to plan. When times are tough, you may look to a credit card or a loan to help you get by. If you’ve had some late payments or even had a default, you could still be eligible for a mortgage.
At CMS, we have whole market access and have specialist lenders on hand to support borrowers who have experienced financial difficulties. Some high street lenders allow for a little bit of poor credit and we will always try them first before consulting the specialist lenders. We strive to keep your costs as low as possible as we know how important it is to get back in control of your finances.
Stay in control of your finances
We work with Checkmyfile through their partnership programme. Let us guide you through your full credit report and find a solution to your borrowing needs. Sign up for your detailed credit report here. It’s free for 30 days, then a monthly fee applies – cancel online at any time.
Understanding your credit history
The first step to getting a mortgage with poor credit is understanding what situation you are in. Many credit issues will stay on your credit report for up to 6 years, so knowing what you’ve experienced and when will help to make your mortgage journey easier.
Keeping on top of bills can be difficult, but little blips don’t have to stop you from getting a mortgage. If you’ve missed a payment on a bill or a credit card, there are lenders who are able to help.
It’s important to understand that missing payments makes you look risky to a lender. Because of this, mortgage lenders may offer to lend less or may increase rates to reflect your credit position, but it largely depends on how recent the late payment was and if your credit score has repaired itself.
An arrangement to pay is an agreement between you and a company to raise or lower the cost of your monthly repayments. Although you have taken the right steps to put an arrangement in place, this can still be seen as a negative payment marker and may lower your credit score.
If you have an arrangement in place, it’s important to know how much you are paying and how long the arrangement is for. A mortgage lender needs to take this into account to assess what mortgage is affordable for you.
A default is usually registered as a last resort if you are continuing to miss your monthly repayments. This is typically between 3 to 6 months, but can vary depending on the lender’s terms. A default can occur regardless of how much money you owe.
You will receive a default notice first, and at this stage, the notice will not appear on your credit file. You then have 2 weeks to make any outstanding payments. If you cannot make the required payments, your account will default and this will be registered on your credit file.
There are many specialist lenders who will ask to hear your side of the story and assess your situation on a personal level.
A County Court Judgement (CCJ) is a court order outlining that you owe money.
It’s important to act quickly with a CCJ as you are able to make an appeal if you have proof of paying what is owed. If you pay back the money you owe within the first month of receiving the CCJ, this can be removed from your credit file.
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Top Tips
- If you’re thinking of taking out a mortgage in the near future, we suggest that you do not apply for any more credit cards, loans or pay-in-3 services at this time.
- We recommend that you close down any credit cards that you no longer use. It’s best to only have access to credit that you need.
- Even if your credit score is good now, past financial problems can complicate a mortgage application. It’s best to be honest and upfront with your credit history so that we can help.
- Make sure you set up a Direct Debit for the minimum payment on your credit card. This ensures you never miss a payment.