4 min Read
14 Jun 2017

Written by Damien

Damien is one of the most widely quoted money and investment experts in the national press and has made numerous radio & TV appearances. He created MoneytotheMasses.com while working in the City when he became disillusioned with the way the public were left to fend for themselves because they could not afford financial advice.

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Can you get a mortgage with a very poor credit score?

How to get a mortgage with a very poor credit score?Can I get a first time buyer mortgage with a bad credit rating?

Hi Damien,

I am a first time buyer with a 20% deposit of £40,000. I am in permanent employment with earnings of £45,000. I have a default from an ex-partner's mobile bill settled, but registered 21 months ago. I do have 3 other defaults again from mobile bills, 3 years, 4 and 5 years respectively. I have finance for a car which has been open 2 years in June, with all payments made. I have no other adverse credit issues. What are my chances of getting a mortgage with my low credit score, my Equifax score is 357 and my Experian score is 659?

Answer:

On the face of it I'd say your chances of getting a mortgage with your credit score are good and certainly better than you think. From your figures I assume that you are looking at buying your first house for £200,000 with a £160,000 mortgage.

The first thing I'd question is have you allowed for the cost of purchase (including solicitor's fees, stamp duty etc.) separately to your deposit of £40,000? A common mistake that first time buyers make is to not factor in all the potential costs and to end up short.

Your scenario is a good example of when getting advice from an independent mortgage broker is your best option. Many people look at mortgage comparison tables and assume that they a) would be accepted by the lenders shown and b) xxxxx also receive the rate shown even if they were accepted. A whole host of factors, including your credit history, determine whether you can get a mortgage. They will also dictate which is the best mortgage for you to apply for to increase your chances of being accepted. You want to avoid numerous failed mortgage applications as these will be a mark on your credit history and hamper any future credit applications (including a mortgage).

A good mortgage adviser would able to say for definite whether you will be able to get a mortgage once they've seen your credit report (and that of your partner if you will be living together). Each mortgage lender takes a different view on whether to offer a mortgage to a person with a poor credit rating so dates and amounts of defaults really matter. A good mortgage adviser will also look at your other commitments such as the car loan and credit card balances. These will all affect the mortgage affordability criteria.

How to get a mortgage with a bad credit rating

The good news is that it can be possible to get a mortgage even with a poor credit record, although it admittedly won't be at a market leading low interest rate. That is why we provide access to a free mortgage review for everyone to help people in your exact situation. Most people assume that they will never get a mortgage and so give up on their dream of owning a home prematurely. I strongly suggest that you follow the simple steps below, which takes seconds, to start the ball rolling and have the best chance of obtaining the mortgage you need:

  1. Start the mortgage tool and select the 'adviser type' as 'mortgage adviser'
  2. For the 'specific area of advice' select those that are appropriate (i.e 'first time buyer' and 'sub prime')
  3. Select the mortgage size you'd like to get if you were able to
  4. At the bottom of the form a logo will now appear that says 'free mortgage review' - make sure you select that
  5. you can also add any comments before submitting the form.

Good luck!