Mortgages with Adverse Credit

Mortgage lenders will assess mortgage applications by looking at the applicants credit history.

Mortgage lenders believe that if your credit history has been good then you are likely to be a low risk customer.

The method they use for assessing applicants is by credit scoring. This an automated system which looks at credit history, employment, age, occupation, marital status.

Some of these factors will be out of your control. However the main influencing factor will be your credit history.

Read more about adverse credit and adverse credit mortgages

You can view your credit history by contacting the main credit reference agencies; Equifax and Experian to request a copy of your credit file.

What are the things to look for?

Address history - The lender must be able to positively identify you over the last 3 years. Are you on the electoral role?

Credit history - You might be suprised to see mobile phone contracts listed here. Any credit agreement may be here including mortgages, secured loans, car loans, personal loans, hire purchase agreements, credit cards and store cards.

Your payment history is the main factor here.

Mortgage lenders will look for evidence of borrowing in the past. So if you have held a recent mortgage and your mortgage payments have been made on time then this will help your credit score.

How much credit do you have?

Too little credit will be a problem. The lender needs to be confident about positively identifying you and establishing that you will meet your credit obligation

Too much credit can also be difficult. If you have a lot of credit - relative to your income - then this will also ring alarm bells

Sometimes with the best intentions, things go wrong and the loss of employment or breakdown of a relationship can mean that credit may go unpaid leading to action by the creditor.

When a credit agreement is missed it will show as a missed payment. If 3 or more are missed the creditor may issue a notice of default.

A default is evidence of a breakdown of the credit agreement.

If an arrangement cannot be reached then the creditor may escalate matters by taking court action. A successful prosecution will lead to a county court judgement CCJ being issued. Read more at adverse credit mortgages