Bad credit mortgages

Yes, you can remortgage with a low credit score. Again, your options will be more limited than for someone with a good credit score, and the rates on offer are likely to be less competitive. But the longer you keep making your mortgage repayments on time, the higher your credit score will go, and this will go a long way to convincing the lender that you’re a responsible borrower. 

How much equity (the percentage of the home that you own - i.e what you have repaid, compared to the current value of the home) you’ve got can also be an important factor here. Those with a large amount of equity in their home will typically get a remortgage more easily, even if they have bad credit, as there is less risk for the lender.

Credit scores tend to change fairly slowly over time, and if you have very bad credit, it can be years before your file is in good shape, however, there are a few quick wins that will improve your score:

It’s fairly easy to sign up to a credit reference service to receive ongoing access to your credit file. This way you can check in on it regularly. Some banking apps now include a section where you can view your score and recommendations on how to improve it, but bear in mind they will typically be associated with just one of the three main agencies.

Some companies, such as Check my File, allow you to view all of the information held about you by all of the credit agencies, in one place. This can be useful, as lenders tend to use different agencies based on their preference, so it’s good to get an overall picture. 

It depends on your circumstances, and a mortgage broker will be best placed to help you make this decision if you’re struggling to. In some cases, you won’t have a choice but to wait until your score has increased, especially if your credit issues are very severe. 

Most people with less severe or older credit issues are able to find a suitable mortgage, but will pay a higher rate of interest. Buying a house with bad credit or waiting until your file is in better shape will be down to personal choice, so you'll need to weigh up whether paying more now and owning a home sooner is more important than potentially paying less in interest and charges in the future.

The documents you need will typically be the same as any other application, however, if you have particular reasons for bad credit that the lender is willing to accept, such as missing bills due to being in hospital, for example, you may also need to provide evidence of them. 

You will also need:

The loan that lenders are willing to provide will be based predominantly on affordability, and they tend to use a multiple of your disposable income to calculate the figure. For the average borrower, this is between four and four and a half times your annual income, but lenders may choose to reduce this multiple slightly if you have poor credit.