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What is bad credit?
There are a number of ways that you can accumulate a bad credit score. Even those with no credit history may be viewed negatively by Mortgage Lenders. Although having no history of borrowing will not affect you as severely as late or missed payments.
When you miss payments on a credit agreement, it’s recorded on your credit file and can subsequently end up as a default. A County Court Judgement (CCJ) is issued by a creditor when you fail to repay defaults after a number of requests. This can affect your ability to get a mortgage. Although the good news is that it is still possible to find lenders who will accommodate you.
Bad debt can also go beyond CCJs. With adverse credit such as IVAs and other types of Debt Management Schemes, as well as repossessions and bankruptcies all significantly impacting the availability of Mortgage Lenders who will lend to you.
Will anyone lend to me with a CCJ?
It’s possible to secure a mortgage with a CCJ. However, there are a number of other criteria that Mortgage Lenders will consider. This can include how recently the CCJ was registered, the amount it was issued for and whether or not it has been satisfied.
Independent lenders who specialise in assisting bad debt clients will usually be able to help you. Although it can be more difficult finding a mortgage with an unsatisfied CCJ. Your chances of acceptance will also increase in time. With those issued more than three years ago being less of a concern than those issued in the past twelve months.
If you have defaults and CCJs owing to missed repayments on your mortgage, this will be considered much more risky by most lenders than an unpaid mobile phone bill, for example.
Each lender also has their own individual criteria surrounding the issue of bad debt. Some are more concerned with the age of the debt, others the amount and some simply wanting to ensure that it has been settled. This means that it’s entirely possible for one Mortgage Lender to accept you whilst another would not. Which is why it’s so important to speak to a Mortgage Broker like ourselves.
How long will a CCJ stay on my credit file?
Whether or not a CCJ is satisfied, it remains on your credit file for a period of six years. Your account, however, will reflect whether or not the CCJ has been satisfied. After six years it will automatically be removed. At which point your credit report will no longer be an issue when you apply for a mortgage.
If you satisfy a CCJ within thirty days, it’s possible that it will not appear on your credit file. You also have the right to ask for any marks related to the CCJ to be removed. Or a ‘notice of correction’ to be applied to your file.
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We’ll take care of all the heavy work. From finding the right mortgage product and providing you with a detailed quote, to submitting the mortgage application on your behalf and guiding you right through to the completion of your mortgage.
How do I improve my credit score if I have a CCJ?
Your chances of securing a mortgage will typically be lower, the further down the list the reason for your default appears:
- Ensure your CCJ(s) are fully satisfied (repaid)
- Keep on top of all future payments
- Maintain the accuracy of your credit file through regular checking address details etc
- Ensure you appear on the electoral roll at your current address
- Close old credit accounts
- Remove any financial connections with others who may affect your score
- Minimise use of your credit agreements and don’t apply for further credit
First Time Buyers and Remortgages – will the process be different if I have a CCJ?
First Time Buyers will need to prove that they are creditworthy. However, they will not be more or less substantially affected by CCJs than anyone else.
It’s usually possible to remortgage with a CCJ, unless it is as a direct result of missed mortgage payments. It’s worth bearing in mind that you may achieve a more competitive rate if you wait until your credit rate is stronger, however.
How can a Mortgage Broker help?
It’s perfectly achievable to secure a mortgage if you have a history of bad credit, so long as you approach the right lender. That’s where we come in, because, here at Mortgage Broker Services, we have access to a wide range of specialist lenders who will consider borrowers with credit issues.
We work with this type of lender daily and know their individual lending criteria inside and out, making it much easier for us to determine who will lend to you and who won’t. This saves you from further impacting your score with failed mortgage applications. Contact us today to see how we can help you.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.