The short answer to the question of whether you can get a mortgage with a poor credit score is yes, fortunately.
In spite of the fact that pretty much all lenders will run a credit check on you before green-lighting your application for a mortgage, some negative notes you have against your name will impact your credit score more than others will. The time passed since those marks against your name were recorded as well as how much money was involved both play a major role in determining your credit score.
Some of the incidents which go down as negative records against your name may include:
- Missed payments, including credit card loans and your mortgage will form part of your credit report for up to seven years
- Defaults on payments
- If a third-party collection agency has purchased your debt, that will deal some damage to your credit rating (collections)
- Bankruptcy, civil judgements, or tax liens forming part of any court judgements can all remain on your credit report for up to 7 to 10 years, depending on the circumstances surrounding their listing
- Repossession of your home due to defaulting on your mortgage (foreclosure and repossession)
- An account given to you by Consumer Credit Counseling Services (CCCS) may be noted on your credit report
- Credit inquiries about personal loans, credit cards, and mortgages can all remain on your credit report for a period of up to two years, whether or not they’re approved
Even though you might currently have a low credit rating which has the high street lenders and big banks refusing to lend you the money you need to borrow, this shouldn’t discourage you and have you giving up. Generally, credit scores are slowly improved over time, however if you believe that you have a poor credit score, here are some positive steps listed which you can take to improve your score as required:
- It’s very challenging to get credit if you’re not registered to vote, so make sure to register on the electoral roll
- Even the smallest of errors on you listed address can alter your credit score for the worse, so make sure to check for any mistakes on your file
- Credit that’s linked to that of another person who has a bad score can impact your personal rating, so be cautious about who you’re linked to and be sure to check
- High existing debt levels will invariably deal some damage to your credit score, so ensure to pay off any existing debt that you can
- Bring some stability into your life by staying in one location for as long as you can, as moving house frequently can create a bit of unease amongst some lenders, even if you’d be moving between rental properties
The pointers mentioned above are important to consider if you’re looking to make use of the services of Mortgage Brokers, as this indicates that they understand the uniqueness of each case and will therefore likely treat your case with the kind of targeted focus it deserves.
