Adverse Credit

Expert help with adverse credit mortgages 

If you have a history of adverse credit, you may be concerned about your ability to obtain a mortgage. However, The Lending Channel can help you obtain an adverse credit mortgage so that you can still purchase a new home with bad credit.

Adverse credit, also known as bad credit, can result from missed or late payments, defaults, or bankruptcy. However, having adverse credit doesn't necessarily mean that you're ineligible for a mortgage.

At The Lending Channel, we offer impartial advice to help you understand adverse credit mortgages, how they work, and what options are available to you. 

Read on to learn more about adverse credit mortgages and how we can help you secure the home you deserve. 

adverse credit

What is bad credit?

Bad credit is a term used to describe a poor credit score or credit history. A credit score is a numerical representation of an individual's creditworthiness, which is based on their credit history.

A poor credit score can be the result of missed or late payments, defaulting on a loan, or having too much debt.

Having bad credit can make it difficult to obtain credit products, such as loans , credit cards, and mortgages . Lenders may view individuals with bad credit rating as higher risk, which can lead to higher interest rates or being declined for credit products altogether. 

With that being said, there is no universal definition of 'bad credit' when it comes to the lenders point of view; each lender will see your circumstances differently.

Every lender has a different set of criteria for what constitutes an attractive investment. Therefore, even if you've been rejected because of your low credit score before, this does not necessarily mean every lender will not accept you. 

Nevertheless, a few factors are seen as 'higher risk' by most high-street lenders. These include: 

  • Missing credit card payments and bills 
  • A track record of applying for credit too often 
  • Defaulting on a loan 
  • Having your home repossessed 
  • Been declared bankrupt

It's important to note that each factor carries a different level of risk depending on the time passed and the amount of money involved. Smaller factors, such as missing one credit card or bill payment, are unlikely to affect your score enough to stop you from getting a loan. However, having your home repossessed or being declared bankrupt are considered very high-risk, making it much harder for you to find a lender who will accept you. 

At The Lending Channel, we understand that adverse credit can be a challenge when it comes to obtaining a mortgage.

Our expert advisors can help you understand your options and guide you through the process of applying for an adverse credit mortgage.

Contact us today on 01738 583008 to find out how we can help you get the mortgage you need. 

What is an Adverse Credit Mortgage? 

An adverse credit mortgage is a type of mortgage designed for individuals with poor credit scores or credit histories. It can also be referred to as a bad credit mortgage.

Bad credit lenders understand that not everyone has a perfect credit score, and they are willing to work with individuals who have had financial difficulties in the past. 

Adverse credit mortgages typically come with higher interest rates and fees than standard mortgages . This is because the lender is taking on a higher level of risk by lending to someone with poor credit. However, this doesn't mean that adverse credit mortgages are unaffordable. Many lenders will work with borrowers to find a mortgage product that suits their individual needs and circumstances. 

At The Lending Channel, we have years of experience helping individuals with adverse credit obtain mortgages . Our expert advisors can help you understand your options and find a mortgage loan that is right for you. We work with a range of lenders who specialise in adverse credit mortgages, and we can help you navigate the application process from start to finish. 

adverse credit mortgages

Can I still get a mortgage with poor credit? 

Whilst obtaining a standard mortgage with bad credit can be difficult, an adverse credit mortgage or sub-prime mortgage, is specifically designed for individuals with a bad credit history. 

When it comes to mortgages for adverse credit, you'll find that you don't have as many options to choose from, but you may find some lenders who focus on this type of specific arrangement.

These lenders will consider personal circumstances, such as family hardship, health, and other severe life disruptions.

'Bad credit' mortgages work just as regular mortgages do, except they'll come with more costs and restrictions to compensate for the additional risk. This includes higher interest rates and limits on how much you can borrow. 

You may also be required to come up with a larger deposit, often at least 20-25% of the property's value. 

The Lending Channel can help find the right deal and bad credit mortgage lender for you. If you are in need of help when it comes to adverse credit mortgages in Scotland, don’t hesitate to reach out to our team or make an online loan enquiry through our site.

Checking your credit score

If you feel like the rates and deposit on an adverse credit mortgage are unsuitable for you, another option is to wait until you have built your credit rating before applying to lenders. 

This way, your chances of being accepted by a high-street lender will increase, substantially lowering your monthly repayment costs and up-front deposit.

There are several things that you can do which will help to raise your bad credit score: 

  • Pay bills on time
  • Don't miss any repayments for loans or credit cards
  • Make sure you close down unused credit 
  • Register for the electoral roll

Whatever you decide, it is important to optimise your credit score. Keep your credit report up to date, and make sure you monitor it. If you feel extenuating personal circumstances are relevant, you can add a note of correction on your report for lenders to see.

To view your credit score, you can use an online credit report generator. It is worth trying a few different generators, as all of them will be slightly different. Using them won't affect your credit score. 

Each lender has its own system of credit evaluation, so there is no universal cut-off score. It's best to prioritise score as highly as possible, whatever your circumstances. 

How long does adverse credit last? 

The length of time that adverse credit remains on your credit report depends on the type of adverse credit and how long it has been since it occurred.

For example, missed or late payments can remain on your credit report for up to six years, while more serious issues such as bankruptcy can remain on your credit report for up to 10 years. 

However, just because adverse credit is on your credit report doesn't mean that it will automatically prevent you from getting a mortgage.

Many adverse credit lenders understand that individuals may have had financial difficulties in the past. These lenders may be willing to work with you to find a mortgage product that suits your individual needs and circumstances. 

At The Lending Channel, we have experience working with individuals who have adverse credit. Our expert advisors can help you understand your credit report and provide you with debt management plan to improve your credit score over time so you can get the mortgage deal (and house!) that you deserve. 

How long does adverse credit last?

Applying for an adverse credit mortgage

If you have a poor credit history it’s likely that you will undergo a more rigorous vetting process when applying for a mortgage. 

The lender will inquire about any credit problems, and you must be up-front about them. Once you disclose your prior circumstances, they may ask to see additional evidence regarding your financial situation. 

The lender will want to investigate your income, your savings and evaluate your spending. They might request more bank statements and pay slips from you to analyse your financial situation.

This provides the lender with peace of mind that, should they accept you, you could now afford the mortgage repayments even if interest rates may rise. In short, they want to see how well you manage your money. 

It's wise to improve a poor credit rating. Although a good credit score takes a long time to build, it's always advisable as it allows you to be seen in the most desirable light. 

There are a few things you can do to seem at your most attractive to adverse mortgage lenders: 

  • Take the time to budget wisely. Reduce your costs where you can and always aim to have money left over at the end of each month 
  • Pay your bills (such as loans repayments, utilities, rent) on time and in full 
  • Be realistic about your finances and about what property you can afford 
  • Supply a guarantor who can share repayment culpability with you

Bad credit adviser

Let us help you find the right adverse credit mortgage lender 

When it comes to complex mortgage products such as this one, the mortgage application process will be helped tremendously if you seek the help of an experienced mortgage broker.

A bad credit mortgage broker will provide no-obligation advice to help you find the right lender and product for your needs. They’ll also help you navigate the application process, seeing it throgh until the very help.

Here at The Lending Channel, we take a customer-first approach to every service or product we help with. Our professional advisers will help you to find a deal you're most likely to be accepted for, taking your past credit issues into account and navigating the tricky waters of adverse credit mortgages.

While other brokers and high street banks may turn you away, we consider every client on a case-by-case basis. We’re here to support you in the best way that we can, no matter what your financial situation or credit score.

To discuss your situation in more detail and to find out more about adverse credit mortgages, contact our friendly team today.

We are a credit broker, not a lender and are paid a commission by our lenders, full details of this along with our fees will be detailed in the Terms of Business we issue to you.

The Lending Channel ltd is a member of the National Association of Commercial Finance Brokers (NACFB).

2/1 King James VI Business Centre, Friarton Road, Perth, PH2 8DY
Tel: 01738 583008 | Fax: 01738 500402

The Lending Channel ltd are authorised and regulated by the Financial Conduct Authority.
FCA number 626787
Company number SC334818
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