Credit Report Archives | Bad Credit Mortgages

Checking your credit file will NOT affect your score

Many people avoid checking their credit report because they have been lead to believe it will have an impact on their overall score. In fact, you can check your own credit report as often as you like without it having an impact on your score. Although every check of your report will create a footprint on your file, only searches made by financial lenders will leave a mark on your file that other lenders will see.

Why do we check your credit score?

As responsible mortgage brokers, it’s our job at Clever Mortgages to recommend the right products to you. Having access to your credit file means we can carefully consider your lending options and discuss other options with you if they are more appropriate.

We want to make sure that we place you with the right mortgage product and with the right lender for your situation. We also have options available for people with a poor credit history.

What does your credit score mean?

Your credit score shows lenders how trustworthy you have previously been at repaying your debts. This helps lenders make an informed decision about whether or not they should lend to you now. Be aware though of the differences between no credit and bad credit.

Checking your credit score can be daunting, especially if you’ve never checked it before. The advisers at Clever Mortgages will be more than happy to help you better understand your credit score and what type of loans you might be eligible for.

Refused a mortgage with a good credit score?

Every lender has their own lending criteria which will usually take into consideration more than just your credit score. Other factors such as borrowing against the property value, length of time in your current job or at your current address.

If you know your credit score is low, then there are things you can do to improve your credit score before applying for a mortgage.

A poor credit history can complicate things when trying to get a mortgage. Many mortgage providers won’t lend to someone who has suffered from bad credit regardless of their situation now. If you’re confused about credit or you’ve been unsuccessful in getting a mortgage then you should work to improve your credit score.

Unfortunately, there’s no quick fix for your bad credit score. Your credit history has been built up over time and the things that have had the biggest impact will be different for everyone. You will need to demonstrate over time that you can continually make payments in full and on time. Any negative information that might be on your credit file such as CCJs, an IVA, late payments or bankruptcy will exist on your credit file for 6 years since the date they were recorded. You might need to wait until these have disappeared from your file if they are preventing you from getting approved.

Luckily, there are some things you can start doing right away to help improve your credit score:

1. Check your credit report

The first step to improving your credit is to know exactly what your situation is. You should get into the habit of regularly checking your credit score. This is so you can make sure the information about you is accurate and up to date. You will also be able to see how your credit score improves over time as you start making more positive financial decisions. Checking your credit score is free through a credit reference agency including Experian, Equifax or Clear Score.

2. Plan to pay off your existing debt

Try and pay off all your existing debt as soon as possible. If you can’t do this yet you should create a plan so you know when you’ll have this paid off. If you use any savings to help pay off debts then make sure you still have some money aside for emergencies. This will help you to avoid getting into any debt again. Paying off your current debt will help to show lenders that you’re working to rectify your current financial situation.

3. Be cautious when using credit cards

Cancelling any credit cards that you no longer use can help to show that you’re intending to borrow less. It can also stop the temptation to use them at any point. On the other hand, if you don’t have a credit card, taking one out and managing it properly can help to improve your credit score. You should only do this if you know you can afford to make repayments on time and in full.

4. Have some responsible credit

If a credit card is not appropriate for you, or if you can’t get approval for one, then taking out a small form of credit might be a better idea. This could be a mobile phone contract or store card. Providing you manage these well it can show lenders that you can pay bills responsibly, helping you to show that you can be trusted with a bigger loan.

5. Get on the electoral roll

Another way you can help to improve your credit is by making sure you’re on the electoral roll. If you’re not then you should register as soon as possible. Although it’s not compulsory to vote, having your details on the electoral roll allows lenders to easily verify your identity and address. This can have a positive impact on your credit score.

6. Consider bad credit finance

If you can afford to pay higher interest rates and potentially put down a bigger deposit, then bad credit finance options such as a bad credit mortgage might be for you. These are designed for anyone who has a low credit rating and unable to get competitive rates for finance. The benefit of paying higher mortgage rates, for now, is that providing you pay on time in and full, it can demonstrate that you are someone who can be trusted to lend to. If you can continue to prove this you will increase your chances at being eligible for more competitive interest rates in the future.

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