How Do I Get a Mortgage if I Have a Low Credit Score?

Updated: Jul 7

How Do I Get a Mortgage With a Bad Credit Score?

Credit scores are like good reputations - they take a long time to build up and it only takes a moment to ruin them. Forget a utility payment or pay a mobile phone bill late, and your credit score takes a hit. On the other hand, if you’ve been a paragon of financial virtue and never had a loan or a credit card, then you might not have a credit score at all!

There are so many reasons why you might have a low credit score that it would take a book, not an article, to describe them all. Whichever it is, a high street bank is more likely to deny you a mortgage if you have a poor credit score. Their computer will simply say no.

If this sounds like you, then these four tips will help you to get the mortgage that you need, to buy the home that you deserve.

What is a low credit score?

Before applying for a mortgage, you should check your credit score with the main credit reference agencies. This is free to do so - simply visit the agency’s website, register, and order your credit report. The three main credit reference agencies that are used in the UK are Experian, Equifax, and TransUnion.

Understanding what a low credit score is can be a complicated process. Your credit score is representative of how each of the credit reference agencies analyses your credit files, so therefore your score may be different from each agency. However, this does not mean that the agencies have different versions of your credit file, it is simply how they score your credit history that will differ. Finding out your credit score is a great place to start to know where you’re at, but it’s what’s in your credit files that really matters when it comes to applying for mortgages.

Tip #1: Understand your credit score

The first step to getting a mortgage is to understand why your credit score is low. The main factors in a credit score calculation are:

  • Payment history (35%)

  • Balances owed (30%)

  • Length of credit history (15%)

  • Credit applications (10%)

  • Credit mix (10%)

Tip #2: Correct any errors on your credit report

It is not uncommon for errors to appear on your credit report, so if you find any errors you should have them corrected before making a mortgage application. To do so, you will need to contact the credit reference agencies and your creditors, tell them about the mistake, provide evidence to support your claim, and then ensure it is corrected.

Tip #3: Use a specialist mortgage broker

High street banks and mainstream lenders don’t like lending to people with bad credit scores. However, there are some lenders that treat borrowers with bad credit as more than just a number. Most specialist lenders only deal with people through a specialist mortgage broker, like Mortgage Thoughts.

In this article, you can learn about bad credit mortgages and lenders that offer them.

Tip #4: Let the mortgage broker take the strain

Each bad credit mortgage lender has different capabilities, criteria, and areas of bad credit specialisation. The mortgage broker will discuss your needs and credit circumstances with you to fully understand your situation.

Then, on your behalf, they will search the mortgage market for you - including the high street lenders. It’s a stress-free process for you, saving you hours and ensuring all potential lenders are assessed on your behalf - including those elusive specialist bad credit lenders.

It’s not easy to get a bad credit mortgage on your own,

but it couldn’t be simpler with a broker!

Whatever the reasons for your low credit score, you may still be able to get a mortgage. If you are in a bad credit situation, contact Mortgage Thoughts today and let us help you. You’ll be surprised what options may be open to you - we know where to find them.

For more information on how to improve your credit score, here are 9 tips to help you improve your credit score.

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