There are occasions we speak to people and we are either unable to help or they do not like the options available to them. We make suggestions to these people on how to improve their options and so I thought it would be a good idea to share those things here.
Tips to overcome bad credit
Here we have our top 5 tips to help you get a mortgage specifically if you have had bad credit or adverse credit issues in the past.
Bad credit & Time
There is a saying that “Time is the greatest healer”. That is very true when it comes to bad credit, the biggest thing you can do to help improve your chances and options is to give yourself some time. You are more likely to be accepted at better rates and a smaller deposit with adverse that is 5 years old than you are if it is 5 months old. How long you will need will depend on the level of adverse. But we are more than happy to have a conversation and give you an idea based on your individual circumstances.
Check your credit reports are accurate
Check your reports. Not just one credit report, but all 3. You can get a free credit report from Equifax, Experian, TransUnion, just google statutory report from <Credit Agency> and you will get the link to it. This is important because it allows you to ensure everything is correct. Its not uncommon to see Defaults registered at a later date or ongoing. So check it sooner rather than later. This allows you time to check for problems and get them rectified before you start looking for a mortgage.
Occasionally it will be reported incorrectly and in your favour. It is rare that happens but you might want to refrain from chasing that if it happens!
Do not run up more credit!
Many people think taking out more cards and loans can help your score. It can, but its not a given that it will. However more importantly, you have to look at how much it is likely to help. If you have 3 defaults from 12 months ago, it will not help enough to overcome that with normal rates. But it could harm your chances with smaller lenders as they can take the view that you are addicted to debt or living beyond your means. There is a line. On one side it can reflect badly and on the other it can help to overcome negative issues.
If your adverse is minor and historic (over 3 years old) a bit of debt being paid on time may help. But if you have a lot of adverse, forget it. We need to find a more flexible lender who does not credit score. We will happily talk this through with you as it really does depend on your likelihood of getting a high street mortgage.
Put your underwriter hat on…
No that does not mean lose your personality and try to frustrate people with silly requests! (Only joking if any underwriters are reading this). When I look at applications, I try to put my underwriter hat on and think about if I was signing off your mortgage, what would I want to see? It is easy for you to say “yes but…” as you know yourself. An underwriter is looking at an application form and a credit report. Its a good idea to try to get as many positives on your side as possible.
Things like where has the deposit come from? If you are getting a gift, that is going to be less favorable than a saved deposit. Its not possible everyone to save a deposit and that is fine. But maybe if you could save up £1,000 – that is still you showing you have contributed. If thats not possible its not a deal breaker do not worry.
Are you living in an overdraft? How would you view that if it was a random person? How long have you been in your job, how much debt have you run up since having problems with the debt you had…. Just try to think about things from the other side, what would you like to see if you were lending someone money?
Let us save your hairline!
How could I not put this as a top 5 tip?! We specialist in bad credit so who better to have on your side than a broker with over 10 years experience, 5 star ratings and award winners?!
We have success stories from past customers here, we have also written guides on overcoming bad credit here. But the guides only help so much. They do not help you to find the lenders, there are a few reasons for that – criteria and appetite change over time, lenders come and go, even how they underwrite can change. But also, lets be honest it would potentially put us out of business if we divulged all of our secrets! This is hard earned experience with receding hairlines and holes in the wall from where we bang our heads when underwriters make life harder than necessary to show for it. Let us save your hairline!