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Got Bad Credit? Follow These Adverse Credit Mortgages Tips From Our Experts

It’s bad enough to have bad credit – don’t make it worse. Take the right steps today and boost your chances of getting approved for an adverse credit mortgage from our panel of specialist lenders.

Managing your expenses is an art. It’s never too easy to keep doing all the right things when it comes to spending, saving and investing your income. However, we have spotted a few worrying trends over the last couple of years, and that – more than anything else – is the reason we decided to ask our experts for some tips.

Average UK household debt – as per the latest available figures – stands at over £15,400. A huge chunk of this is made up of unpaid credit card bills. The use of credit cards has increased consistently across the world, and Britons aren’t any exception. By January, 2019, UK credit card holders owed a collective sum of over £72bn.

We’re citing these figures for a reason: Using credit cards recklessly is the top reason for accumulating bad credit.

Taking Bad Credit Seriously

Experian, one of the leading credit reference agencies in the world, reports that there’s immense room for credit education, especially among the 25-30 age group.

For example, the agency reported last year that teenagers typically had better credit record than the users in their 20s – a sure sign of mismanagement of money. Bad credit isn’t a problem that one can just wish away – it takes months to repair a broken credit record. It also means more difficulty in getting the kind of loans one wants and leading the kind of lifestyle one wishes to lead.

Thankfully, bad credit isn’t the end of the road.

Depending on your credit history and your affordability, many lenders are willing to accept bad credit mortgage applications. We, at Commercial Finance Network, help our customers who may have poor credit at their disposal secure customised, low-interest adverse credit mortgages.

A bad credit mortgage is similar to a regular mortgage. It only involves relatively higher interest rates and requires you to put up a higher deposit. With a leading broker like Commercial Finance Network on your side, you can now work with UK-wide specialist lenders who offer some of the lowest interest rates going around.

Here’s how you can maximise your chances of getting approved for a poor credit mortgage.

It’s Always Better To Approach Specialist Lenders

We’ve already talked about the good news – there are many lenders out there willing to help you buy your dream home despite your bad credit.

But this good news comes with a caveat most brokers won’t talk about: Only specialist lenders can boast of reasonable approval rates in this niche. In other words, if you approach a generic mortgage lender with a bad credit mortgage application, you’re almost guaranteed to have to face a rejection. Banks and other mainstream lenders use stringent algorithms to assess mortgage applications, virtually denying many bad credit holders a chance to step onto the property ladder. 

Such a rejection, when accompanied with a ‘hard credit check’, may further dent your credit history.

The only feasible solution to this vicious cycle is to make sure that you aren’t reckless while sending out your adverse credit mortgage applications. Knowing the track record of your lenders is of utmost importance.

It is, however, easier said than done.

That’s where working with an experienced broker counts in your favour. For example, our bad credit mortgage services help you find specialist lenders who know how to assess your applications based on your income potential, expenses and credit history. This immensely improves the probability of getting a fair mortgage quote.  

Know The Typical Bad Credit Situations Inside Out

Knowing what it takes to get approved while also knowing where you stand in regard with these norms is the key to getting a good mortgage deal. Unfortunately, many applicants are unaware of these finer details, thanks mainly to the fact that their brokers never take any effort to spell these out for them.

We broker bad credit mortgages that cover a range of cases, including but not limited to the following:

  • Missed/Delayed Repayments: Nearly every UK household has debt to repay. This isn’t necessarily a bad thing – it just turns out to be problematic when you fail to make the payments on time. Consistent delays or missed repayments can hurt your credit score, pushing you into the bad credit zone.
  • County Court Judgments: CCJs are typically issued when the creditor approaches a court and the court decides that you owe them money. Getting a CCJ doesn’t harm your credit history as long as you settle the dues within a month. In an event you fail to do so, the CCJ will typically be in force for up to 6 years.
  • Bankruptcy: As should be obvious, bankruptcy cases can make it virtually impossible for you to get any credit. In such cases, approaching a specialist bad credit mortgage lender remains the only viable course of action.
  • Repossession: If you already have an ongoing mortgage on a property (or a secured loan against any other asset) and the lender decides to repossess the property on account of missed payments, your credit history will show the repossession event to all future enquirers. While this is an extreme situation, we do come across such cases from time to time.
  • Debt Management Plans: A debt management plan is a product that helps you reduce your monthly outgoings by clubbing your existent loans into a more affordable package. At times, the creditor may put what is routinely referred to as a DMP flag in your history of repayments, letting future creditors know that you had to resort to using a DMP to pay your bills. This is a relatively less adverse situation, in that creditors feel less at risk accepting DMP cases for bad credit loans.
  • Payday Loans: Payday loans are high-interest and short-terms loans. These are immensely controversial products and should ideally be saved only for emergency situations (if at all). Payday loans also have high default rates, meaning that your lender will want to know if you really are capable of repaying your bad credit mortgage.

When you understand these causes, you can get an insight into how lenders treat bad credit mortgage applications.

Important – Take Steps To Repair Your Credit History

We have already mentioned that bad credit isn’t the end of the road, and you can still get a good mortgage deal using our adverse credit mortgage services.

This, however, doesn’t mean that you should always have to pay higher interest rates. The healthier your credit history is, the cheaper your mortgage will be. Moreover, it’s never too late to start taking steps in the right direction to repair your credit.

Repairing your personal or business credit history is a long process that requires consistent efforts. You can start by following these easy points:

How To Access Your Credit Report?

Credit reports are generated by credit reference agencies. You may already know about the leading ones: Equifax, Experian and TransUnion. These agencies work with lenders and banks to build credit reports for individuals and businesses.

To access your credit report from these agencies, you may follow the directions given here:

  1. Experian
  2. Equifax
  3. TransUnion

How To Build Credit History?

You need not take any particular steps to build credit history. Once your file is created, it’ll automatically get updated as per the information received by the agencies from lenders. If there are any discrepancies in your credit report, you can always get them corrected.

How To Get On The Electoral Roll?

Getting on the electoral roll is one easy step that goes a long way towards building your credit score, authenticating your credit report and safeguarding your identity.

Considering how easy it is to get this done, this should be among the first steps you take to repair your credit history before you apply for an adverse credit mortgage.

Use Your Credit Cards Judiciously

As we mentioned earlier, reckless use of credit cards is probably the most common reason for individuals to fall into a debt trap. We understand that not everyone has the convenience of digging into their savings for regular household expenses, but you should maintain a certain level of discipline while using your credit cards.

If you have one of more inactive credit cards, close them as early as you can to avoid having to pay unnecessary maintenance fees. Moreover, think about moving your credit card debt to the cheapest alternative available. Most importantly, make sure that you make timely payments on your credit card bills.

How To Apply For An Adverse Credit Mortgage?

There are two ways to apply for a bad credit mortgage – approaching the lender directly and working with a broker.

Bad credit mortgages are specialty products, and hence, you are at a disadvantage when you approach the lenders directly. On the other hand, when you work with an experienced broker, you not only get qualified advice from their experts, you also get to access mortgage offers from lenders that otherwise may never have been on your radar.

At Commercial Finance Network, we make applying for bad credit mortgages a breeze through our simplified, no-hassle online application portal.

Time Is Of Essence

Repairing a poor credit score can seem like a daunting task. What many applicants don’t realise is that it’s all about long-term affordability. You can damage your credit score over a short time period but repairing it may take much longer.

In other words, you need to be patient and disciplined in your ways over time to boost your chances of getting approved for a bad credit mortgage. If your credit score is in a really poor shape, do consider letting a few months pass before you apply for a loan of any kind. During these months, you can set your finances straight, make timely payments on your existing loans, settle your monthly bills on time and move the credit needle in the right direction.

At any stage, if you feel the debt you have is overwhelming and getting the better of you, do consider contacting the National Debtline (or any other reputed debt assistance organisation).

What To Look For In A Bad Credit Mortgage Broker?

Commercial Finance Network is one of the leading whole of market brokers in the UK. The features our products bring on board all conform to the highest industry standards and knowing about them will give you an idea about what you should look for in an ideal bad credit mortgage broker.

The Panel Of Lenders

Whole of market brokers can help you connect with a wider range of specialist lenders.

Track Record

An ideal adverse credit mortgage broker should have a satisfactory track record in terms of approval rates and industry reputation.

Transparency

All brokers are required to let you know about the fees and commissions involved. A specially prepared document called the Key Facts Illustration (KFI) will detail the breakdown of fees and commissions, so that you – as a customer – can understand the deal better.

Bad Credit Shouldn’t Stall Your Dreams!

With a range of bad credit mortgage products and a panel of UK-wide specialist lenders, we make sure that every adverse credit mortgage application we receive is treated fairly.

To request a call back from one of our experts, call us on 03303 112 646. You can also submit your bad credit mortgage online.