What are Credit Scores and Credit History?
  • Missed or late payments
  • Debt management plan
  • Discharged bankruptcy
  • Defaults, CCJ’s or IVA’s

What are Credit Scores and Credit History?

Applying for a mortgage when purchasing a new home is an extremely exciting time for any home buyer. However, for many buyers, the event can be ruined by the presence of a bad credit score. But why should a credit score have such a profound effect on how successful you are in the purchase of your new home and obtaining the mortgage that you need.

What are Credit Scores?

What is a Credit Score?

A credit score is a reflection of a person’s ‘creditworthiness’ based on analysis of a person’s credit files. A score is given to an individual, which has been based upon that person’s history with taking loans or credit and their success in paying those debts back.

A good credit score reflects a buyer being a trustworthy recipient of a loan, meaning that lenders will be more likely to meet your mortgage requirements when you are looking to purchase your dream home. Simply put, a bad credit score represents the opposite of this, and suggests that those looking to take a loan are not a trustworthy option.

What Affects Credit History?

Your credit history can be affected by a number of factors, which banks and lenders will take into account. A negative credit history and eventual credit score can be soured somewhat by:

CCJs – A County Court Judgment in which someone is taking action against you following a missed payment

Defaults – The failure to meet the legal obligations (or conditions) of a loan, such as a home buyer failing to make a mortgage payment

IVAs –An individual voluntary arrangement for those attempting to avoid bankruptcy

As well as many other possible factors. People can prevent further negative marks upon their credit history by performing soft checks, which do not leave a ‘footprint’ when other lenders come to check your history.

Can I Improve My Credit Score?

Those with adverse or negative credit scores can improve their credit scores, but it does take time. Subtle changes such as paying debts on time make huge changes to your credit score and how lenders will see you as a possible lending option. You should also look to cancel all credit cards and lines of credit that are not in usage.

An important short-term step is also to keep the information on all credit related documents up to date as much as possible. Any existing mistakes will make it difficult for a broker to understand your requirements and successfully place a mortgage for you.

Getting a Mortgage With Bad Credit

Many buyers are put off applying for a mortgage or fall at the first hurdle, because of the presence of an adverse credit score or history. At Just Mortgage Brokers, we specialise in helping those with a history of bad credit find the mortgage that they require. We work with specialist lenders not on the high street, who can supply the mortgage that your require at the rates to suit you.

To discuss your mortgage needs with our professional team, get in touch with Just Mortgage Brokers today.