Any number of things can cause you to have a bad credit rating which can make it difficult to obtain a mortgage, remortgage or loan through traditional high street bank or building society.
Some traditional lenders work to very rigid guidelines and have a rather sanctimonious approach when deciding to approve an application for a loan or mortgage. If you have a bad credit history such as CCJs, IVAs or payment arrears, your chances of obtaining a personal loan, mortgage or remortgage from one of these lenders is significantly reduced.
The reason for this is the majority of lenders use standard credit scoring procedures, This involves accessing your credit file and giving you a score based on its contents. Any instances of late or missed payments will reduce your credit score, and if you fail to meet the minimum number of points, your mortgage or loan application may be declined due to your perceived bad credit history.
Although there are no precise figures, an estimated one in five people in Britain are initially turned down for a loan or mortgage by a high street lender.
In recent times the number of specialist adverse credit, non standard or non conforming lenders has reduced dramatically. The global financial meltdown and credit crunch has resulted in only a handful of lenders remaining in the market who specifically cater for people suffering with low credit scores. The reduction in competition has coincided with a steep rise in rates, meaning people with a bad credit rating are likely to face considerably more punitive interest charges when compared to what they could have enjoyed before the credit crunch.
These lenders offer a
limited selection of deals to people who have anything from a small £250 CCJ
that was settled more than a year ago through to people who have been
made bankrupt, have several defaults or CCJs.
Depending on your circumstances, you may not be off the radar for all mainstream lenders. As a rule of thumb, the worse your credit history, the more difficult and higher the interest you'll have to pay. Deals are no longer plentiful with only a small number of products available for people with CCJs. To be sure of getting the best deal, you should contact a broker. If your credit history is not too suspect, an independent broker will first check to see if a standard lender will consider you. If not, then a specialist lender might be able to assist.
Many of the specialist lenders in this market are not household names you'd have heard of, but they are part of large organisations. Several are owned by large US banks, such as Southern Pacific, Preferred and Future, while others are owned by UK high street lenders. Amber, for example, is owned by Skipton Building Society, Accord by Yorkshire Bank, The Mortgage Works by Portman and BM solutions which is part of Halifax Bank of Scotland (HBOS). Chelsea Building Society and Norwich & Peterborough Building Society offer adverse deals directly.
An expert mortgage consultant with access to the entire market should be able to find you a lender. Their expertise should save you time and money, as they'll shop around to find you the best deals from all the products which are available for people with adverse credit in the UK.
See which lenders may be able to help.
Whatever the reason you want to borrow money, whether you're looking to consolidate debts, pay an unexpected bill, buy a car, go on holiday, pay for a wedding or home improvements, find out which lenders may be willing to lend you the money you want.