Why is poor credit a problem when getting a mortgage?
Mortgage lenders want to be confident that their customers will be able to pay their mortgage every month. Having poor credit, now or in the last 6 years, can make them nervous that you won’t be able to do that.
Examples of poor credit include Bankruptcy, IVAs, CCJs, defaults and missed payments.
What should I do to improve my chances of getting a mortgage?
We recommend these three actions to get yourself back on track for getting a mortgage.
Review your credit file
Improve your finances and address issues on your credit file
Get on the electoral roll (if you aren't already)
Get specialist help and advice
Review your credit file
Your credit file is a summary view of your credit history, transactions and current credit situation and commitments, as obtained from a credit reference agency (the most well known credit reference agencies in the UK are Experian, Equifax and TransUnion).
Get a copy of your credit file to get all the insight you need to understand why you might be deemed to have poor credit. We've listed some example providers below.
There may be a fee to access your credit file. There are other providers not listed.
We are not affiliated to any of the providers listed below.
Possibly the most well known in the UK, they use their own data to generate your credit file. | |
The most comprehensive, with information sourced from Experian, Equifax and TransUnion to generate your credit file. | |
Uses Equifax to generate your credit file. | |
Uses TransUnion to generate your credit file. |
Improve your finances and address issues on your credit file
Taking steps to address current or historic issues (check out your credit file for a summary), as well as reducing any potential new impact to your credit profile will help significantly. Some steps may have a more immediate impact than others.
Pay any debts you have on time
Pay your bills when they’re due
Close any old, unused accounts
Don’t apply for more credit (no matter how tempting the offer)
Stay out of your overdraft
Avoid payday loans
For more support and information on money and debt management, check out:
Free impartial advice from the government about money and pensions. | |
Free advice on how to be debt-free. | |
General advice on a range of topics including money, debt and housing. |
Get on the electoral roll (if you aren't already)
Also known as the electoral register, this is a list of everyone who is eligible to vote in the UK. Mortgage lenders and credit agencies check if you're on the electoral roll as a way of verifying your identity and current address. The longer you've been on it, the better.
Key actions related to the electoral roll
Check you're on the electoral roll
You can check whether you're on the electoral roll on your credit report or by contacting your local council.
If you are registered, make sure your details are correct
Make sure your electoral roll record is accurate and your application matches it.
Being registered at a previous address but having your current address on a mortgage application could cause issues with an application. As could a mis-match with your name, for example, getting married and changing your surname or being known by another name.
If you're not registered, get registered
You can do it here: https://www.gov.uk/register-to-vote
Your local council will inform the credit reference agencies of your registration but it can take up to a few months for credit agencies records to be updated.
Get specialist help and advice
Having poor credit doesn’t always mean you can’t get a mortgage. Sometimes we can’t help with mortgages for customers with poor credit as it needs more specialist knowledge to handle, but there are services available that can help.
You can either find an appropriate specialist yourself, or we have a recommended partner for this sort of thing.
Free service which matches customers with financial experts, including mortgage brokers who specialise in poor credit. | |
Our recommended partner, Advantage Financial Solutions, specialise in finding mortgage solutions for customers with poor credit. |
Important information: Our partnership with Advantage Financial Solutions
Mojo Mortgages offers introductions to its available preferred partners and may receive an introduction fee from the partner. Fee details can be found here. Advantage Financial Solutions is directly authorised and regulated by the Financial Conduct Authority (FCA) under firm reference number 965036. Access their Privacy Policy.
Your home/property may be repossessed if you do not keep up repayments on your mortgage. You may have to pay a charge to exit an existing mortgage deal early. Think carefully before securing other debts against your property. The FCA does not regulate most BTL mortgages/products for commercial or investment purposes.