Bad Credit? What Are Your Options

Understanding Bad Credit

Bad credit can result from:

  • Missed or late payments
  • County Court Judgements (CCJs)
  • Defaults
  • Bankruptcy or Individual Voluntary Arrangements (IVAs)
  • High debt usage

Lenders assess your credit report to gauge your reliability as a borrower. The more recent or serious the issue, the more impact it may have.

What Are Your Options?

1. Specialist Lenders

Some lenders cater specifically to applicants with poor credit histories. They consider each case individually and may be more flexible, especially if the issues are historic or have been resolved.

2. Higher Deposits

Expect to need a larger deposit—usually 15–30%. This reduces the lender’s risk and may help offset a lower credit score.

3. Guarantor Mortgages

A family member can act as a guarantor, helping you secure approval by backing your mortgage with their income or assets.

4. Joint Applications

Applying with someone who has a good credit rating can improve your chances, though their finances will also be assessed.

How to Improve Your Chances

  • Check your credit report: Dispute any errors and understand what’s affecting your score.
  • Clear existing debts: Reduce credit card balances and avoid new borrowing.
  • Register on the electoral roll: This simple step builds trust with lenders.
  • Save a larger deposit: The more you can contribute upfront, the better your odds.
  • Work with a broker: Mortgage advisers familiar with adverse credit can recommend lenders who are more likely to say “yes.”

The Role of a Mortgage Adviser

An adviser can be your biggest ally. They know which lenders are open to applicants with bad credit and how to present your case in the best light. They’ll guide you through any extra documentation and help you avoid applications that might lead to rejection.

Conclusion

Bad credit doesn’t mean no mortgage. It means choosing the right lender, preparing thoroughly, and possibly accepting slightly higher rates or stricter terms. With the right strategy and support, homeownership can still be within reach.