Mortgage with Bad Credit

How to Get a Mortgage with Bad Credit

Finding a mortgage isn’t easy at the best of times, especially with bad credit. We’ve got all the information you need to know about finding a mortgage when your credit is bad.

Finding the right mortgage deal can be challenging. After all the saving and shopping around, you think you’ve found the right deal. Then, comes the lender’s credit check… And you find out, your credit score isn’t up to scratch. Credit scores are an essential part of landing yourself a mortgage. And, we hate to be the bearers of bad news, but it’s not looking great for you if you haven’t got a good credit score.

According to Zing Mortgages, a leading mortgage broker in Chelmsford and for the rest of Essex, you may not be able to land yourself a mortgage if your credit score isn’t good enough. In this blog, we’ll be telling you why you may not be able to find a mortgage and how to improve your credit, so you can. So, if you’re looking to learn about mortgages and credit scores, you’re in the right place.

Bad Credit Mortgages

Bad credit mortgages don’t exist – they just aren’t a thing. Unlike bad credit loans, mortgages come a too high of a price to just give out to anyone. Because mortgages are for large amounts of money, which means that lenders need to ensure that their investment is secure with you. That’s because your credit score establishes your reliability as a borrower, so lenders can see if you’re going to be able to make repayments on time and be able to keep up with them. Because the interest lenders earn off of your home is the way they make their money, and repossessing your home means they’re losing out on 25 years of interest and repayments – that’s not a risk they’re willing to take.

So, without bringing down the mood too much, you’ll need to have good credit in order to land yourself a mortgage – with pretty much any lender.

‘Good’ Credit Score

Now, there are 3 different scales of credit scoring in the UK, set by 3 different credit companies. They are, Equifax, Experian and Callcredit. All of these companies judge credit scores on different scales, so one good score on one, may not be so good on another. See below to find out what each different company considers good credit:

  • Equifax – 420/700
  • Experian – 880/999
  • Callcredit – 4/5

All of these different scales are the basis of good credit, and it’s each mortgage provider has a different credit scale they judge on. So, if your credit score isn’t good, you may find it more difficult to find yourself a mortgage.

However, it’s not all bad news, because there are some easy ways to improve your credit in order to land yourself a mortgage in the future. We’ll be giving you our top tips to move your credit score from poor to good, with a few easy things you can do on your own.

How to Improve your Credit

So, now we’ve banged the drum of having a good credit score, we need to give you the tips on how to improve it. Out top 3 tips are just below:

  1. Check your Credit

One of the easiest ways to start improving your credit is to go really in-depth with your credit report. You can get this through various free sites (like Clearscore and Noddle), or for a minimal fee to receive your fully up-to-date report (the free sites usually have a 2-month delay on your credit history). From this point, you can see your exact credit score. There are many things that can affect your credit history, and one of them is being linked financially to someone with bad credit. If you can sever this credit-tie, you can improve your score slightly. Some may find errors on their credit report, if you can prove these are false, they can be removed. Which means, again, your credit score will improve.

  1. Clear your Debt

Debt is another factor that impacts credit negatively, because having large amounts of debt means your credit score drops. So, if you can, try and clear your debt – or make movements to start repaying it regularly. Credit scores are made up of every financial product we’ve taken out in our name. Be it bills, loans or credit cards, missing repayments means that your credit score falls. By meeting these repayments on loans, credit cards and bills, your credit score will gradually improve.

  1. Having a Presence

There are a few little things that can actually help your credit score, if you don’t have one. It’s quite common for younger people to not have a credit profile. Why? Because if you’ve never taken out a loan or credit card, your credit profile may not be apparent. No credit is just as bad as bad credit. To remedy this, and improve your score, you can:

  • Register to vote
  • Stay at your address for over a year
  • Get your name on household bills

By doing this, your credit profile will begin to build up. Having good credit is an essential part to getting a mortgage. Unfortunately, bad credit means no mortgage, however you can use our tips to rebuild your credit profile and be on your way to landing yourself a mortgage.

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