Buying A House With Bad Credit: Key Steps To Consider
Although bad credit history can make it difficult to secure a mortgage, it is certainly not impossible. If you are looking to buy a new home, you may be unsure as to what the available options are. Many lenders may be willing to offer flexibility depending on your chances of fitting into their acceptable criteria. To help you navigate this tricky situation, we have prepared comprehensive guidance on how to overcome bad credit records. These tips will help you understand what you can do next to start climbing onto the property ladder.
Find A Bad Credit Mortgage Broker
The best way for someone with a poor credit history to improve their chances of getting a mortgage is through a broker who specialises in bad credit mortgages. For example, Money Nest will match you to an expert, who will offer personalised advice based on your individual circumstances. They will help you find the best deal available to suit your situation perfectly. This can save you plenty of time, worries, and money, as a mortgage broker will have access to the whole market. As a result, you will have more options and better support to deal with a range of credit issues.
Obtain And Analyse Credit Reports
Your first port of call should be to get hold of your credit reports and analyse which issues are showing up. There are three major credit reference agencies that you can use to obtain your credit score including Equifax, Experian, and TransUnion. These reports will provide you with a good perspective of the mortgage providers you are able to approach. You will be able to review your past loans, overdrafts, credit cards, and even some utility bills. It is important to recognise that all three files will differ, and even if one or more show issues, it is still possible to secure a mortgage.
Rebuild Your Credit Score
After assessing your credit issues, it is important to work on fixing them. Many factors can affect your ability to get a mortgage from a single late payment to bankruptcy. You will need to begin pushing up your credit score by making all repayments for bills on time. Paying off your debts will show lenders that you are no longer in financial difficulty. This means that you may have a wider choice of lenders and access to more competitive rates. It may also be beneficial to obtain a credit builder credit card, once you are ready to handle the responsibility of repayments.
Consider Getting A Guarantor
Another possibility you may have is to assign a family member as a guarantor. However, both of you will need to consider the implications of this decision. In this case, a guarantor will have a charge against their own house. This means that they will be legally required to pay, if you default on your mortgage payments. As you and your guarantor will be tied financially, any missed payments can affect both of your credit scores. Therefore, it is crucial to consider the pros and cons of a guarantor mortgage. If they cannot pay on time, their house could be repossessed.
You May Also Enjoy
Is it worth buying a fixer-upper property?
Nottingham letting agents are the busiest in Britain
The six protections every new-build buyer must check before signing
Rental price and average salary tracker – February 2026
UK property sector gender pay gap keeps getting wider
