How to purchase a property with a bad credit rating

Monday 16 August, 2021

In this article Vishal Gulrajani, Mortgage Adviser in Cheshunt, Hertfordshire and London reviews why you shouldn’t despair if you have a bad credit rating, as it’s still possible to get a mortgage.

How you can get a mortgage with a bad credit rating

A lot of individuals are under the impression that having bad credit means you can’t get a mortgage and therefore can’t buy a property. Instead, bad credit usually means you won’t be eligible for the best rates or terms. So, remember it is possible to buy a house with bad credit, but of course there are caveats. 

What is bad credit?

Firstly, let us understand what we mean by the term bad credit as it is very generic. Anything from a missed payment on your credit file to complete bankruptcy is considered bad credit, but obviously there is a big difference in consequences depending on what sort of bad credit you have. 

For example, a missed payment five years ago on a telecommunication bill will have very little significance if anyone is looking at your mortgage options. However, becoming bankrupt in the last year will have a detrimental impact and you can consider yourself lucky if any mortgage lender is willing to lend to you. Please note anything that happened over six years ago will not be on your credit file and is irrelevant for mortgage purposes, although bankruptcy or repossession will usually need to be declared on applications even if it over six years old.

Who has bad debts?

Now in my experience I tend to find those who consider themselves having bad credit and are worried about getting a mortgage tend be those with very minimal bad debt. They may have suffered a life event in their past and missed payments several years ago. Something like this is not that detrimental as we have mortgage lenders that will accept explanations and check your credit profile to see if this matches up. Please note if you have bad credit due to a provider wrongly inputting debts on your credit file or fraud has been committed on your credit file, we can easily appeal this and get a notice of correction on your file, so your mortgage options are not hampered.

Thomas Oliver’s top tips for anyone concerned about their credit rating

My top tip to anyone who is worried about their credit is to obtain your credit report with a 30-day free trial on as this gives you access to all three major credit report sites that mortgage lenders use. Also please don’t be alarmed if your score shows up as poor because firstly the score is not that significant as we are more interested in your account conduct and at Thomas Oliver, we can show you how to improve your score quickly and easily.

There will be some of you that will have bad credit, which is significant in respect of mortgage lending, in these circumstances we have less options but remember we can still do something. This can range from approaching a bad credit lender with a higher interest rate so you can still obtain the property, and then remortgaging you back to a mainstream lender with preferential rates in two or three years when your credit rating has improved. Alternatively, we can set you on a plan and show you how to improve your credit and give you a timescale of when we can approach mortgage lenders, but the key is planning and not being afraid of your situation and asking for mortgage advice.

In Summary...

Overall bad credit is not such a bad thing as you might think as our Thomas Oliver mortgage brokers do have options. However, if you don’t plan and get mortgage advice you will always be in the same predicament, so please contact us on 01707 872000 to find out how we can improve your situation and help you purchase your property.

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