Getting a Mortgage with a Poor Credit Score

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 can help.

It’s important to understand that missing payments makes you look risky to a lender. Because of this, mortgage lenders may offer you less of a loan or may increase rates to reflect your credit position. However, this largely depends on how recent the missed payment was and if your credit score has repaired itself.

With access to your full credit report, our advisors will be able to see your missed payments and research the best mortgage lender for you.

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. Have a chat with one of our experienced advisors and tell us about your past or present arrangements. 

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. This is essentially your last chance 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. 

While falling behind on this many payments may seem like the end of the road, there are 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. With this off your file, it will unlock access to more mortgage lenders.

A Debt Management Plan (DMP) combines your debts into one affordable monthly repayment. This money goes to a debt management provider who will then distribute the payment between the creditors you owe.

There are lenders who can offer mortgages even if you have a DMP in place.

Bankruptcy is a last resort for dealing with debts that cannot be repaid. You may have decided to declare yourself as bankrupt or your creditors have applied to make you bankrupt. Whatever the situation, you may still be eligible for a mortgage with a specialist lender.

Usually after a year of being bankrupt, you will be discharged and released from your debts. This fresh start is the gateway to securing a mortgage, but it takes time. The longer you’ve been discharged for, the more mortgage lenders will consider your application.

If you have experienced bankruptcy, we strongly recommend speaking to a mortgage broker rather than applying directly to a lender. If you want to check what lenders are available to you, speak to one of our experienced brokers who can assess your situation.