What does adverse credit mean and how does it impact on getting a mortgage?

You may have heard of the term ‘adverse credit’ but what actually is this?

Adverse Credit Meaning

This is when your credit score and credit file are affected negatively due to your credit history, there are a number of reasons why this might happen (we’ll come on to this later)

Does having adverse credit affect me getting a mortgage?

No matter what size of deposit you have, or the nature of the property you wish to buy, if you have a poor credit rating it can often feel very disheartening when trying to obtain a mortgage as there are a more limited number of lenders willing to consider your application.

Having a mortgage application rejected will worsen your overall credit score.  Therefore, if you feel you may struggle to obtain a mortgage due to issues with your credit history, you should always seek advice from a broker before making an application.

We have strong associations with lenders who are more understanding of adverse credit and we will start by being able to give you independent advice about your ability to get a mortgage so that you don’t worsen your position by applying to a lender and having your application rejected.

What causes adverse credit?

There are a number of factors that contribute to your credit score, some of the most common reasons people have poor credit ratings or adverse credit include:

  • Missing a loan, credit card or mortgage payment
  • Having an ongoing loan with a payday loan provider
  • Being declared bankrupt or entering into an individual voluntary arrangement (IVA)

It’s also worth noting that if you have never taken out credit for anything, you may well find yourself being rejected for certain finance items – because you haven’t yet built up a record of credit.

How do I know if I have adverse credit?

There are a number of tools online that can be used to measure your credit score.  The ones frequently used by lenders that you can check yourself are Experian, Equifax, and Checkmyfile

It is important to note that by using one of the credit checking tools above you will leave a “footprint” on your credit report in the form of an inquiry.  This will however not negatively affect your credit score. 

Making it easier to find a lender who will accept your application

If you have adverse credit and are struggling to secure a mortgage, we can help.

We treat every client as an individual and aim to make it easier for those with adverse credit to secure a mortgage, whether you’re a first-time buyer or a homeowner looking to remortgage or move to reduce your outgoings and address your financial position.

Just give us a call or fill in the ‘get in touch’ form below and we will arrange a time to speak to you to talk about your current and future mortgage options.  

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About Key Solutions

Here at Key Solutions we believe taking out a mortgage should be easy. Why shouldn’t it? So when people say buying a home or getting a mortgage is one of the most stressful things ever, we say, come and speak to us.

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