How to get approved for a mortgage with a poor credit history

Many mortgage applications are being rejected for reasons that are easily-fixable, according to research by Shawbrook Bank.

A survey by the lender found that key reasons cited for mortgage applications being declined included a poor credit score (25%) and missed payments (21%).

But there are ways you can get a mortgage even if you have a poor credit history.

Tidy up your credit report

One of the best ways to get yourself ready before applying for a mortgage is to tidy up your credit report and take a bit of time to boost your score.

If you have any missed payments on your record, make sure you’ve paid off any arrears – settled payments look better to lenders than outstanding debts.

Then, try to build up a few months of history of paying your bills on time before submitting your mortgage application. Lenders want to see a consistent pattern of reliably meeting payments, so you want to make sure any missed bills are put far behind you.

Next, look for other ways to improve your credit score. Make sure you are registered on your electoral roll, and consider holding off opening any new bank accounts or credit cards for a while.

Opening new accounts can temporarily impact your score, while a period of stability can give your score space to improve.

It’s worth fully scouring your credit history and making sure there are not any mistakes on your record, too, particularly if you aren’t sure why your score is low.

Consider using a specialist lender

Many people may not realise that there are specialist mortgage lenders who help people with low credit scores or poor credit histories to find a suitable mortgage.

These are often names you might not see on the high street, but they are designed for people who might be automatically rejected by mainstream lenders.

Be aware that mortgage rates can sometimes be higher with specialist brokers, as they are taking on some extra risk by lending to people with poor credit histories.

But they can be a way to get onto the housing ladder sooner than you may be able to with a high street bank.

Consider using a mortgage broker to find the right mortgage for you. You will usually have to pay a fee to a broker, but they tend to have access to a wider range of deals than you may be able to find online, and this could save you a lot of money long-term.