Bad Credit

Even if you have a low credit score, you can still qualify for a mortgage. The outcome depends on where your credit falls on the scale, as there's a subtle difference between 'fair' and 'bad' credit. Certain lenders cater to individuals with poor credit, but keep in mind that these mortgages may come with higher interest rates and additional fees.

The first step is to get hold of your credit rating – you can do this free of charge with various online companies, such as Equifax, Experian and TransUnion (or ask us and we can help). Each has their own ‘good’ score so check this too. Some things you can do to secure a good credit rating include:

1. Register on the Electoral Roll. Check for mistakes, including address, date of birth – you’ll be surprised at how the wrong address you affect your score. Also, keep an eye out for any fraudulent activity on your cards or if you’re linked with another person – having a joint account with someone who has bad credit can affect you too (even if you’re married).

2. Pay your bills – set up direct debits to make sure you meet the payments and can be seen to be making regular payments.

3. Use credit and store cards as little as possible. Try and clear the debt from one before starting another. Cut them up if the temptation is too great.

Yes, in all likelihood you will. This might seem harsh, especially if you are trying to pay off your debt and save for a deposit, but lenders are trying to protect their investment.

Six years is the usual time for debts and CCJs to stay on your record. After this time, they are removed, even if the debt remains unpaid. So if you are turned down for a mortgage, be reassured that one day your record will be clear if you can remain debt-free. The more recently you defaulted, and the bigger the sum, the less likely you are to be accepted.

This isn’t a straightforward one. Some lenders will automatically turn you down if you have a CCJ or an IVA, some won’t touch those who have been declared bankrupt recently. The advantage of speaking to Reeds Financial is that we know the lenders that are most likely to offer you a mortgage and we won’t waste any of your time or raise your hopes unnecessarily.

You may need to wait until your bankruptcy is taken off your credit record, which typically happens six years from the date of your bankruptcy.

Yes, it's possible, but it's not easy. Not every mortgage provider is willing to lend to individuals with a history of debt repayment issues.

If you've had the chance to improve your credit score over time, you're more likely to be considered. However, it's unlikely that you'll qualify for the most favorable and competitive deals available in the market.