Can you get a mortgage with bad credit? Expert’s advice for managing your finances

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Buying a house is definitely a worthwhile thing to do. Unlike other assets such as cars, houses tend to go up in value over time which means you’re likely to get more than you paid for when selling at some point down the line. While choosing your dream home is the most fun part of the process, it’s just the very beginning. Mortgage applications involve rooting through your finances, providing all sorts of information and evidence and being subject to serious scrutiny. One expert advises what to do about getting a mortgage when you have bad credit.

Can you get a mortgage with bad credit?

Securing a mortgage when you have a poor credit score is definitely an option – but it won’t be easy.

Speaking to Express.co.uk, Peter Licourinos from the Heritage Property Investment Group said: “Getting a mortgage with a bad credit score can be daunting but it doesn’t mean it’s impossible.

“Banks want and need to lend and there are various products available with smaller deposits, help to buy and for people with a poorer credit score.”

While, yes, it’s possible to get a mortgage on bad credit, one option is to focus on increasing your score so as to ensure you’re opting for your dream buy.

Mr Licourinos said: “My advice is to work with a reputable independent financial advisor and understand your credit report.

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“The best starting place is knowing your different credit scores, understanding what they mean and even how you can instantly and over time improve them.”

The internet has proven revolutionary for almost everything, and credit reports are no exception.

A number of websites, such as checkmyfile.com, are often free or carry a small subscription and can be an absolute game-changer for your finances.

The one mentioned above specifically covers all four of your credit scores, including Equifax, Experian, Transunion and Crediva.

Mr Licourinos says this is a great starting point for anyone who wants to maximise their options when buying a house.

He added: “Once you have done this and found an independent financial advisor, you can start to find the products that work for your personal position.

“And if there are no mortgages available today, you can put a plan in place to improve your credit, meet the criteria and buy the home you are dreaming of.”

Property expert Caroline Hughes reiterated Mr Licourinos’s sentiment to Express.co.uk, saying: “It’s not impossible to get a mortgage with bad credit, but it does make things harder and you will be unlikely to qualify for the best deals.

“To a lender, bad credit suggests you are a greater risk so this means that you will end up borrowing less and paying higher interest rates.”

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In terms of how to improve your credit score, Ms Hughes said: “We would recommend starting to improve your credit score at least six months before you intend to apply for a mortgage – so this means not applying for any credit cards or loans in that period.

“Paying any outstanding debts if you can, and getting out of your overdraft. You want to look as good as possible to the lender before you apply.”

Another great way to instantly improve your credit score is to make sure you’re registered to vote on the electoral register.

Ms Hughes explained: “One of the key things that affects your credit score is whether you are on the electoral roll.

“If you are renting and have moved addresses, then double check you are registered at the right address on the Government website.”

In some instances, you have to show you can get and repay credit in a timely manner for your overall score to improve.

So although it’s generally not a great idea to take out a credit card while applying for a mortgage, if you don’t have any credit cards and have never taken out a loan, your score will be surprisingly low.

Ms Hughes said: “That is because there is no record of your ability to pay back credit.

“To help build up your credit record, you could think about getting a zero percent credit card and using that for everyday purchases, then paying it off in full every month.”

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