Adverse Credit

Yellow Ducks

Being refused a mortgage because of a poor credit history can be a sobering experience, but do not despair, having an application turned down doesn't mean you can't eventually get a good deal

As part of its assessment procedure, a lender will look at your credit records, which it obtains from a credit reference agency. A lender that rejects your application is obliged to say which of the major credit rating firms it uses. You can then contact the firm and ask for a copy of its record on you. Do not go to another lender, because a further rejection will put a further 'credit problem' on your file. Whenever a lender carries out a credit check, it can leave a footprint that remains on your file for six months which could deter other lenders from giving you a mortgage.

Instead, armed with information about why your application was turned down, commission a specialist 'whole of market' independent mortgage broker such as MAPS Mortgages, who can locate one of the few lenders who still specialise in helping people who have had problems with credit. Lenders share information concerning credit with each other through Credit Agencies so it is always wise to declare any previous problems you may have had with credit.

Mortgage Arrears

Some mortgage companies will assist people who have had previous arrears but may impose limits e.g. the total arrears should not have exceeded a certain size/the arrears should not have deteriorated within a prescribed period/regular payments should have been made over a recent period.

County Court Judgements (CCJ's)

These are issued when bills or debt are not paid and remain on an individual's personal record or 'file' for up to six years. They can be removed within that period if the debt is paid and a 'Certificate of Satisfaction' is issued. Some lenders will accept a certain number of CCJ's whether satisfied or not. Defaults are similar to CCJ's but are registered when loan, credit card or mail order payments are missed.

Bankruptcy

Some lenders will consider former bankrupts who have been discharged.

It is becoming much more difficult, following the 'Credit Crunch' to find lenders who will assist someone who has had previous credit problems, which is where the services of a good mortgage broker is invaluable. These mortgages however do come at a price, normally more than a high street lender would charge, so you need to be very clear about the cost of any of these mortgage deals. You can obtain a copy of your credit rating by writing to the two major credit reference agencies; Equifax and Experian. You will need to include details of all your addresses over the last six years together with a cheque for £2 and we have included a link to both agencies

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