How Bad Is A Default On Credit History?
  • Missed or late payments
  • Debt management plan
  • Discharged bankruptcy
  • Defaults, CCJ’s or IVA’s

How Bad Is A Default On Credit History?

When acquiring a mortgage for a new home, a history of bad credit, can be a cause of great stress. For many, the stress of bad credit can be compounded by the presence of a default on your credit history. It is a negative occurrence to have a default on your credit history and will remain on your history for six years. The existence of a default can cause some difficulty should you look to acquire a mortgage, regardless of your experience in the housing market.

What is a default, how bad is it?

A Default refers to failure to pay a debt, which is normally issued after three to six months of missed payments. The default notice will take the form of a formal letter warning you that you are behind on your debt repayments. The details included on the notice will include:

  • Creditor and debtor details
  • Details of the original credit agreement
  • Details of the default on this original credit agreement
  • Early settlement figures (if applicable)
  • What you can do to sort out your default
  • Details on what may happen if you do not improve the situation

Can I Fix the Problem?

Should you receive a notice of a default, you are able to take action. The notice that you receive will usually give you 7 days to do what your creditor is asking of you in order to rectify the situation. Should you comply with this, there will be no further action taken. However, should the default not be satisfied, it will be registered on your credit, remaining visible for six years.

Your creditor may also take court action against you. You could be sent a claim form, which means that your creditor has approached the County Court to get a County Court Judgement (CCJ) against you. Like defaults, CCJs will also last on a credit report for a total of six years. Should you owe the creditor more than £750, then they have the right to try and have you declared bankrupt.

Those with a default on their credit file should always look to take action where possible.

Can You Still Get a Mortgage with a Default?

Receiving a default can be a stressful and worrying experience. However, a default should not be looked at as being obstacle against acquiring a mortgage. Specialist lenders exist who work with applicants with bad credit history and indeed defaults present on their credit history to locate them the best deals for their mortgage needs.

Just Mortgage Brokers have unlimited access to the UK mortgage market including these specialist lenders, meaning that we can identify the best mortgage deals for your specific needs. Bad credit mortgages in the UK needn’t be a minefield. Contact Just Mortgage Brokers today to discuss how we can help you acquire a bad credit mortgage.