If you’re worried about a low credit score, the good news is that there isn’t an arbitrary minimum score you need to apply for a UK mortgage.

Credit scores can impact which lender we’d recommend. Still, the first place to start is to assess your financial history and determine which mortgage provider is most likely to approve your application.

In this guide, Revolution Brokers explores some of the key criteria a bad credit mortgage will look for and how your credit rating impacts your mortgage prospects.

How Does My Credit Score Impact My Mortgage Application?

Mortgage brokers use one of the main credit bureaus to assess your credit history. There are others, but UK lenders usually refer to one of the following:

  • Experian
  • Equifax
  • TransUnion

Each agency uses a different scoring system, so lender assessments will vary, and there isn’t a specific credit score minimum you need to be approved.

It’s therefore important to check your credit score before you apply for a mortgage – or work with an independent broker such as Revolution to help with this!

Once you know your credit history and have ensured all the information in your report is accurate, you’ll be better positioned to understand what a lender will see and whether it’s likely to impact your mortgage prospects.

get mortgage with Bad Credit

What Information Do Bad Credit Mortgage Lenders Get From My Credit Report?

Your credit report includes information from several sources, so it contains details such as:

  • Whether or not you are registered on the electoral roll.
  • Public records related to CCJs, IVAs or bankruptcy.
  • Information about the status of your existing financial accounts.
  • Details of any property repossessions.
  • Associated financial partners, for example, anyone you have a joint account with.
  • Previous credit searches, and which companies have run a credit report on you in the last year.

How Do I Know If My Credit Score is Bad?

As we’ve seen, credit scores vary depending on the agency, so it’s worth checking your credit report across all three of the major bureaus to check everything is accurate.

Having a specific credit score doesn’t necessarily mean you are more likely to be approved, either, since lenders look at lots of information to decide whether you meet their affordability rules.

You can also strengthen your approval chances by preparing, and collating documents such as:

  • Payslips and proof of other income.
  • Photo identification.
  • Evidence of your deposit funds.
  • Proof of address.

Revolution uses your information to showcase how you meet the criteria and can often offset a low credit score with another risk mitigation strategy, such as recommending you apply for a longer-term or with a higher deposit.

What Deposit Do I Need to Apply For a Bad Credit Mortgage With a Low Credit Score?

The larger your deposit, the lower the lender’s risk, and the more competitive the mortgage rates they’ll likely offer.

However, it isn’t possible to set a specific deposit value, as lenders consider multiple factors when considering what deposit they might require.

Typical deposits on residential properties start at 5%, but a lender might ask for a 30% down payment, for example, if the applicant has an adverse credit history.

getting mortgage with bad credit

Can I Get a Bad Credit Mortgage If I’ve Been Rejected Elsewhere?

Absolutely – being rejected for one mortgage doesn’t mean you won’t find an alternative.

Revolution works with hundreds of applicants who have been declined a mortgage, usually because they’ve applied to the wrong lender.

As an independent broker, we check each applicant’s eligibility and only recommend proceeding with an application when we know your credit score and other circumstances align with the lender’s policies.

Can I Improve My Credit Score Before Applying For a Bad Credit Mortgage?

You can, and if there are proactive steps you can take to improve your credit rating, it will enhance your mortgage options and usually mean paying lower interest charges.

Some of the steps you can take to improve your credit score include:

  • Building up a history of making credit card payments on time.
  • Avoiding credit applications for 12 months before your mortgage application.
  • Trying not to use your overdraft and using up to 25% of your available credit.
  • Checking your report regularly to ensure all the details are accurate.
  • Registering on the electoral roll if you haven’t already done so.
  • Closing old unused accounts with an unnecessary credit facility.

What Scores Do the Different Credit Bureaus Use?

Every credit-referencing agency uses a different system, assigning a result of very poor, poor, fair, good or excellent.

The scoring systems work like this:

  • Equifax – from 0 to 1,000
  • Experian – from 0 to 999
  • TransUnion – from 0 to 710

Please get in touch if you need support understanding your credit score or seeing how this might impact your mortgage application.

Revolution Brokers have years of experience dealing with bad credit mortgages and are available on 0330 304 3040 or at info@revolutionbrokers.co.uk.

 

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