I Have Bad Credit – Can I Still Get a Home Loan?

One of the biggest concerns when trying to secure a home loan is having a bad credit. Are you currently grappling with one? Before you search for your home loan, there are essential things to understand first.

Do you know what is considered bad credit? Here are some of the facts that you need to know about:

Credit providers may put a black mark on our credit file if you make any of a number of mistakes, and this could cause all sorts of issues in getting your home loan approved, such as;

You Missed Your Home Loan Payments

Mortgage arrears or missing payments on your mortgage or home loan can have a massive impact on your credit score. Lenders become wary to grant you any home loan if your credit history shows that you missed a number of payments, especially in the last six months.

This is more likely to be discovered from your home loan statements, as lenders require these in order to refinance that loan – but some of this information could also be listed on your credit file.

You Have a Tainted Credit History

Lenders will review your credit file and if they see any red flags and these could have a huge impact on your home loan applications, both now and in the future. What makes your credit history bad? Adverse listings including bankruptcy, defaults, court writs, judgements, and numerous credit enquiries are not good signs.

Multiple credit enquiries.

Making multiple credit enquiries can show erratic behaviour and damage your credit file – even if you don’t proceed with the enquiries you made. If your credit file is considered to be a very active file, this can impact in two ways. Firstly, this can negatively impact on credit score. The second is that the lenders will likely seek to understand what each enquiry was and if it went ahead and is still active. If you’ve forgotten to tell the bank about a current liability, this in itself could be enough to tip the scales against you.

You Have Unpaid Bills and Taxes

Your outstanding tax bills, utility bills, mobile phones and other regular expenses can also impact on your application. Although these do not initially show up on your credit file, they can be added to your credit file as a default if you do not pay them or do not make an arrangement with the credit provider to pay them.

Download our complimentary ebook ‘Home loan assessments revealed: How the bank really sees your application’ to learn the tricks of the trade and understand how the banks really assess your application.

So how can you still get a home loan despite your bad credit? Is it even possible?

Here are a few tips that could potentially offer a good chance of qualifying for and getting approved for a mortgage:

  • Choose a mortgage lender that looks beyond credit scoring

Yes, there are mortgage lenders that do not use credit scoring to qualify applicants and approve their home loan. These are lenders that have real persons assessing your credit history and evaluating your personal situation based on your past and present financial standing.

  • Seek advice from a professional regarding your credit report

One of the best ways to help you with your dilemma is to get help from a specialist credit repair company. These professionals assist home loan applicants with bad credit and provide assistance to clean up your credit file or investigate anomalous entries on your history and have them removed.

  • Check out a specialist lender

Mainstream lenders may not help you with your home loan especially if your bad credit history is quite severe. You can try specialist lenders and see if your application could be approved or you are amenable to their offer. You may even be able to use these lenders to clear up all the overdue debt you’re struggling to pay and start the process of clearing up your credit history.

Download our complimentary ebook ‘Home loan assessments revealed: How the bank really sees your application’ to learn the tricks of the trade and understand how the banks really assess your application.

Home ownership and debt relief is still achievable – you just have to know where to look and how to present the application in a way that satisfied the lender. Contact your trusted mortgage broker and credit score specialist today!