Last Updated on May 5, 2023 by asifa
It is not easy to get on the property ladder with a bad credit score. However, options are available for the poor credit score people on affordable bad credit mortgage rates. However, it is always advisable safer to first improve the rating and then apply for a mortgage. With several but dedicated efforts, you can transform your bad credit score into a good one. Do you want to know how it happens? Have a look –
Table of Contents
Never let the situation go worst
It can be easy for a bad credit score person to slip into very bad credit situation. Before you improve, you need first to make sure that at least you don’t get poorer in your credit score performance. For that, you must keep away the worst-case scenarios of bankruptcy, CCJ, IVA etc. as much as possible.
With the help of improved financial or spending habits, you can do it. Just follow the basic rules of a responsible person like – do not make late payments, do not take high-interest loans, do not max out your credit cards and so on.
Check your credit record regularly
At least once in a month, you should check your credit report. The reason? Well, sometimes due to mistake wrong information finds a place on your financial records. For example – there are cases in which people hard to dispute for a loan they never took but it was showing in the report on their name.
Similarly, the wrong spelling of your name may cause significant confusion. Just make sure that every detail that is available in your credit record about your finances is absolutely and accurately correct. Whatever is the type of error, only you have to bear the final loss. Regular attention to your financial details can prevent destruction before it happens.
Gather information on what good credit situation demands
When you go on holiday, you gather all the necessary information about the destination. When it comes to credit score performance, if you want to reach to good credit situation, you need to know what type of features this situation demands in your personal finances.
Here is a collection of varied elements that construct a good credit situation-
- Credit history of around 20 years
- Owe less than £3,500 on credit cards
- Consume a maximum of 8% of the credit limit
- No late payment in last 7 years ago (This level is usually of those who are about to enter in excellent credit situation.
When you know what a particular credit score status asks for, it becomes easy to attain the level. However, in the above points, the condition of no late payments in the last 7 years is not possible as you are currently in a bad credit situation. However, this fact doesn’t stop you from achieving a good credit score. If you embrace discipline in your financial life and keep a strong repayment capacity, you can make it happen. It naturally improves your chances of approval.
Invest in a lucrative product
Lenders not only check your income and its harmony with expenses but also how smartly you use your money. An applicant that has made smart Investments always gets in the good books of the mortgage companies. You can negotiate well on the terms and conditions as the lenders do not want to lose the right customer.
Invest your money in some profitable options like shares, bonds, mutual funds, fixed-interest products, growth investments or whatever it is. If the outcome is profitable and you can earn right, do not hesitate and put your money. Do not take your investment decisions in haste. A regretful step can drastically affect the approval chances on your mortgage application.
Hire a mortgage broker
A broker is not tied to any particular lender; it can give you a completely unbiased suggestion on the best available options. In addition, it can inform you about the lending policies of a particular lender. If you do not like any specific thing about the lender, you can skip it.
If you have a list of preferred mortgage companies, the broker can help you borrow funds from any one of them. Besides, a broker also bargains on the interest rates to get you a cheaper deal. Then you can enjoy smaller instalments, which is undoubtedly a massive relief for any borrower.
So the thing is…
When you struggle for something in the right direction, the results are destined to be perfect. If you follow all the above suggestions correctly, you can achieve a faster revival and can reach to the evident destination of good credit score of 881. If you want to improve, it is never too late. Especially for the mortgage, people usually are not ready to surrender so easily. After all, it is something that helps them materialise their big dream.