How to increase your chances of getting a mortgage if you have bad credit

It can be difficult if you’re trying to buy a home with bad credit. There are limitations on the mortgages you will be offered, and there will be some lenders that may not accept an application. However, instead of focusing on the negative impact, we’re looking at how you can increase your chances of getting a mortgage even if you have adverse credit.

Many of these tips are simple and won’t take up much time or money. At Agentis, we’re committed to offering the best possible financial advice so that people can reach their goals.

Top 10 tips for improving your chances of getting a mortgage if you have adverse credit

• Get an assessment of your credit problems – Having a full breakdown of the key issues and which ones you should prioritise can bring clarity to your situation. A financial advice and mortgage specialist can talk you through the report, areas that would be good to address before applying for a mortgage and will also offer advice on how to approach more complex issues. Always check your credit report before a mortgage lender does.
• Save for a bigger deposit – Saving for a bigger deposit can increase your chances of securing a loan if you have bad credit. This is because you would own more of the property outright from the offset and lower your Loan-to-Value ratio.
• Get a guarantor – It can be worth getting a guarantor as this is an extra layer of financial protection in the eyes of lenders. However, this is not a decision to be made lightly and your guarantor should be fully aware of the risks.
• Register to vote – Being on an electoral roll is an essential requirement as lenders use this data in identity checks. Registering to vote is free and only takes 5 minutes through the Gov.uk website.
• Make sure all the details on your credit report are correct – It’s not just debt that can impact your score; an incorrect address can also have an adverse affect.
• Keep up on bill repayments – Missing phone or energy bill payments can all lower your credit score. If you’re struggling to pay, it’s worth looking at your options. Could you borrow money from a relative or trusted friend? Are there any Government-backed or private funding schemes you can apply for? If you’re not sure on the best course of action, Agentis can advise.
• Have any loans to pay off? – Where possible, it’s worth trying to pay off any outstanding loans before applying for a mortgage.
• Have you been a victim of fraud? – If your score is lower than expected, you may want to check that there are no suspicious payments in your bank statements. If you’ve reported fraud in the past, your score can also sometimes be lowered unfairly.
• Cancel unused credit cards or bank accounts
• Cancel joint credit with ex partners – If you have joint accounts, blemishes on their finances could also impact your report. Where possible, it’s best to cut ties with any joint credit arrangements that are not serving your interests.

How long do financial blemishes stay on your report?

The good news is that old defaults or missed payments (6+ years ago) won’t be included.
The report only includes information from accounts you’ve had open over the past six years.

If you’ve repeatedly struggled to pay bills on time or even missed several payments altogether more recently, it can take months or even years to build up your credit score.

However, if you want to find a more competitive mortgage rate, it can be worth the wait. You can still get a mortgage even with bad credit, but your options will be more limited and might not offer the terms you’d prefer.

Contact the team at Agentis for advice from our bad credit mortgage specialists today.