Bad credit situation is sure to create tantrums in whatever financial decision you make. It is, in fact, notorious for spreading the chaos in lives. When it is about the mortgage, the situation becomes even more severe.
In any possible way, you need to control the annoying consequences the low credit score brings. There are several ways to fulfil this purpose. Apply them, and you can get a guaranteed mortgage despite the bad credit from online mortgage broker like Shine Mortgages.
First, understand the cause of degrading in rating
The solution demands the address of stimulator. You should know the reason that provoked the fall in credit score.
Many root causes give the bitter fruit of derailed payment history.
- Failure in following credit agreement
- Identity theft
- County Court Judgement
- Use of credit cards to their maximum limit
- Having only loans or credit cards. In other words, not having the right mix of credit
There can be many more reasons. You need to know yours and work on it. Of course, it can be challenging to understand what exactly is eating your creditworthiness.
Why not take the help of a financial advisor and take control of the weak points of your financial life? Many broker companies can help to know the complications of finances well. Working in the right direction makes the attainment of mortgage easy.
Do not make loan applications in the greed of a good loan deal
You know how deep the mortgage market is. Good and bad exist together, and it is necessary to understand what is right and wrong.
Is it prevalent to see some lenders promoting their property loans with the tags like guaranteed mortgages for bad credit? Yes!! Your mind asks – Excuse me! Mortgage to a bad credit person and that too guaranteed? How is that even possible? But in the hope to get funds, you apply, and that gives an unnecessary search footprint on your credit report.
The caution against the prevalent jargons is necessary. Few things sound different from their reality.
A person with poor credit score can get a guaranteed approval only in certain circumstances like-
- Improved recent financial behaviour
- A guarantor with good credit score
- The applicant should have 70:30 debt-to-income ratio and other factors
If a lender promises you a guaranteed approval, first confirm its authenticity. However, it may be a difficult task, and for that, it is better to hire a broker. The brokers know the realities of all the lenders in the market. They can help you play safely on the property ladder.
Stop paying the minimum for credit cards
Every small factor is essential and leaves an impact on your chances of mortgage approval. You may find your lender explaining the stories of its borrowers who could not borrow funds due to a small, silly mistake.
Paying the minimum amount on the credit card is one of the biggest financial mistakes. The least payments hurt your credit score because the minimum amount is equivalent to the interest applicable on the credit card. It deducts nothing from the principal amount.
Make the full payments, and you can impress the mortgage providers that you handle credit card well even though it has high rates. It proves a strong repayment capacity and what else a lender can ask for?
The ultimate thought is…
Working in the right way, on the actual grounds is necessary. Only that can bring the change and can improve the chances of approval on property loan. The final thing is, show improvement in credit score and you can borrow funds easily.