Securing a mortgage with a low credit score may seem challenging, but it’s not impossible. Lenders assess your credit score to determine how likely you are to repay your mortgage on time. A low score signals higher risk, often leading to higher interest rates or limited mortgage options.

However, with the right strategy, you can still get a mortgage deal, even with a bad credit history.

What Does a Low Credit Score Mean?

A low credit score typically results from missed payments, defaults, or having too much existing debt. If you’ve been declared bankrupt or have County Court Judgments (CCJs), this will also negatively impact your score. Lenders look at this to gauge how responsible you’ve been with credit in the past. The lower the score, the higher the risk you pose to lenders, which can limit your mortgage choices or increase the interest rates you’re offered.

Tips for Getting a Mortgage with Low Credit

• One way to mitigate a low credit score is to provide a larger deposit. A larger deposit could reduce the lender’s risk, making them more likely to approve your application.
• Specialist lenders often cater to those with poor credit. While mainstream banks may be reluctant, these lenders offer mortgages specifically for people with low credit, though the rates might be higher.
• While you may not have time for drastic changes, simple actions like paying off outstanding debts, avoiding new credit applications, and ensuring bills are paid on time can help improve your score before you apply.
• Your adviser can help you navigate the market and find lenders who are more willing to work with people in your situation. They have the expertise to find suitable mortgage options and can guide you through the application process.

It may take some time and patience, but it’s possible to find a deal that works for you. For more information, contact your adviser today to discuss the best option for you.