Can you get a mortgage with a low credit score?

The short answer to this question is yes! 

While there’s no denying that a low credit score is likely to put you at a disadvantage compared to someone with a better score, it doesn’t mean you need to write off your dreams of homeownership – there are still lenders who will lend to you, although you are likely to be subject to a higher interest rate as a way for the lender to offset what they perceive as their risk in lending to you. 

Your credit score is a way for lenders to be able to see how financially responsible you are based on your borrowing and payment history. If you’ve ever had defaulted payments, CCJs, or bankruptcy against your name, lenders will be able to see this and use the info in order to assess their risk in lending to you. 

How to find out your credit score

There are three major credit reporting agencies companies use to carry out credit checks. Equifax, Experian, and Transunion. You can request a free copy of your file which includes your score, from each provider once a year. This is a great thing to do even if you aren’t thinking of purchasing a property imminently because it gives you a chance to ensure that all your details are up to date and that nothing has been added to your file that you disagree with. 

What to check

When you look at your file, make sure your address details are up to date, that you recognise all lines of credit listed on your file, and if you’ve ever been through a breakup involving de-linking finances, that there’s nothing on your file that continues to link you to that person financially.

Edit your credit file

Although you can’t edit your own credit file, per se, you can absolutely dispute unfair defaults if you spot something that you don’t think should be on there. If you do find anything you disagree with, you can complain to the lender who added it and also add something called a ‘notice of correction’ detailing why you think it’s wrong, and any lenders carrying out checks on you will be able to see this. 

The Mortgage advice bureau has some great advice on ways you can improve your credit score before applying for a mortgage. 

Guarantors

If you have a family member with their own home who is willing to help, then either their home can be used as security (if you failed to meet mortgage payments it could result in the repossession of their home) or they may be able to put a lump sum of money into a savings account with your lender which cannot be accessed until a certain amount has been paid off of your mortgage.

Mortgage advisors are worth their weight in gold

We always advise working with a mortgage advisor, because they’ll make sure you get the very best deal. However, this becomes even more important if you have a complex financial history for any reason. At Lime, we work closely with GRaham lock. He’s great at what he does, and he’ll be able to present you with options based on your personal circumstances.

If you have any more questions please give us a call: 01482 216060