Adverse Credit Mortgages

Records of late or missed payments to credit agreements are recorded for 6 years. This information is shared with credit institutions to help them decide if money they lend is likely to be repaid.

The two main credit record agencies are Experian and Equifax. If you think that information held about you is affecting your ability to obtain credit then you should obtain a copy of your credit file by writing to these agencies. The credit agency makes a small charge for this service

Lenders will use the information held on you along with other factors like how much you earn and your deposit.

sit to place you in a risk band; e.g. A, B, C or decline – your score will dictate how much you can borrow and the rate charged.

  • A: clean credit history, sufficient income to afford all credit commitments;
  • B: an occasional missed payment, sufficient income to afford all credit commitments;
  • C: several missed payments, income could be stretched if further credit is granted;
  • Decline: Credit history not acceptable for lender's lending criteria

Every time you apply for credit a "footprint" of the lender's search is recorded on your file. It is important that you do not apply for credit unnecessarily otherwise the "footprints" will make it appear to other lenders that you are applying for too much credit or are being turned down; application activity will almost certainly influence lending decisions. The golden rule is only apply for credit if you know you need it, that it is competitively priced and there is a good chance that you will be approved.

There are lenders that specialise in mortgages for people with adverse credit. The rate and any fees charged will depend on the severity of the credit problem. The following problems in order of severity are considered by lenders:

  • Defaults: 3 or more payments missed;
  • CCJ’s: issued by a county court when there is no acceptable response to a default);
  • IVA's: agreement to settle a percentage of debt Discharged Bankrupt's: 12 months having elapsed since being declared bankrupt

Adverse credit: information the agencies hold

Electoral roll:
Shows the dates that your name was registered on the electoral roll and the addresses you were recorded at.
Aliases: Created when lenders tell the agency of other names you have been known by or when you tell the agency of other names you have used.

Financial Association:
Show details of anyone you are financially connected to. Created by joint accounts, joint applications, and joint court judgments or from information you provide to the agency.

Public records:
Contains details about court judgments, bankruptcies and individual voluntary arrangements.

Account information:
Credit account information shows details of your credit agreement with lenders Repossession information: Information on customers who have given up their homes or had them repossessed is recorded

Previous searches:
Previous searches show the names of organisations that have seen some or all of your credit report within the past 12 months