Mortgages With A Low Credit Score

Your credit score is a three-digit number based on all the stuff that goes into your credit report. Any time you’ve borrowed money – such as a credit card, loan or mobile phone contract – it all goes into your credit report. Your score gives lenders a look at what you’ve been like when it comes to repaying what you’ve borrowed. Things that affect your score are things like whether or not you pay your bills on time.

Your score is between 0-999. The score you have depends on which credit referencing agency you are checking your score with. For example:

Experian gives a credit score out of 999. They class a ‘good’ credit score to be anywhere between 881 and 960. And a ‘fair’ or ‘average’ score is between 721 and 880.

Equifax gives a credit score out of 700. They class a ‘good’ credit score as anything that’s 420 or above.

TransUnion gives a credit score out of 710. Scores between 604-627 are considered ‘good’ and scores of 628 and above are considered ‘excellent’.

Generally, a score of 700 or higher is considered to be good, but below 670 is considered fair, while below 580 would be considered poor. The lower your credit score, the less likely you are to be accepted by mainstream lenders for credit – like a mortgage.

There could be several reasons why you have a poor credit score. Here are some of the most common…

• Late or missed payments. If you don’t keep up with your bills it’s likely to hit your credit score. Setting up direct debits is a good way to ensure you don’t miss any payments

• County Court Judgements. If you’ve defaulted on an account you might be taken to court for repayment. This can stay as a negative mark on your credit file for years

• Error on your credit file. Mistakes happen, but you can get them corrected by contacting the company involved and leaving a note of correction on your file

• Using too much of your available credit. If you’re up to your credit limit every month it can act as a red flag to other potential lenders that you’re overstretching your finances

• Old credit accounts left open. It’s a good idea to close unused credit card accounts – particularly if they are joint ones linked to someone else. It can give potential lenders confidence that you’re on top of your accounts

• Little or no credit history. If you’ve just turned 18, recently moved to the UK, or have never previously borrowed money, you won’t have had the chance to build up a credit score and evidence responsible use of credit

The high street banks use their automated systems. They want you to hit their own minimum scoring requirements.

In our experience the likes of The Halifax may decline you if you only have a 5% deposit, but can accept if you are able to pay 15% for example, if your credit score isn’t on the high side.

We are happy to assess your credit file in detail as opposed to you approaching numerous different lenders yourself in the hope one of their computers likes you.

You can get individual copies of your credit report from each main credit agency namely Equifax, Experian and Trans Union. However, they all differ slightly in what they show you. So for a detailed and thorough overview of everything in your credit record, and to access this for free CLICK HERE

If we are unable to match you with a high street lender, typical specialist lender deposits begin at 10% with a low credit score.

Feel free to call us on 0330438038

Alternatively email [email protected]  outlining your overall requirements.