When your credit file is not perfect

The reality

Some lenders take a view, others apply a rule

High street lenders tend to apply blanket criteria. A default in the last three years is a decline, regardless of the reason. Specialist lenders look at the circumstances, and there are more of them than most people realise.

One of our clients came to us after a relationship breakdown had left her paying off a former partner's debt. She assumed homeownership was gone. With a gifted deposit from family and the right lender, she completed on her first home.

What matters

What lenders actually look at

The pattern matters more than any single event.

• How long ago it happened, since most issues fall away over time
• Whether it is satisfied or still outstanding
• The size of it, since a £200 telecoms default is not a £12,000 CCJ
• How many separate events there are
• Your conduct since, particularly the last twelve months
• The size of your deposit, which can offset a great deal

Before you apply

Please do not keep applying

Every mortgage application leaves a hard search on your credit file. Several in a short space of time looks like distress borrowing and makes the next lender more cautious, which is how people talk themselves into a worse outcome than they started with.

We would much rather look at your credit file first and tell you honestly where you stand. If the answer is that waiting six months and clearing one thing would transform your options, that is what we will say.

Getting ready

Practical things that help

If you are not in a rush, a few months of preparation can move you from specialist rates to mainstream ones.

• Get your statutory credit report from all three agencies and check it
• Dispute anything that is genuinely wrong, since errors are common
• Register on the electoral roll at your current address
• Keep every payment on time for at least twelve months
• Reduce credit card balances well below their limits
• Avoid new credit agreements in the run up to applying