You’ve heard how a bad credit score can keep you from getting any sort of loan. But while yes, it is true that a bad credit score can hurt your chances at getting a loan, it doesn’t completely halt your chances.
Today we’re going to show you how a credit report has the ability to affect your home loan, as well as the options that are available to you if you do have a low score.
Credit report 101
First things first, you should know what your credit report is and how it is going to affect your ability to get a loan. Simply, your credit report is a record of your borrowing history, and if you pay back lenders on time or not. These reports include all of your personal information including your address and your employment history, but also your payment history. It is essentially a comprehensive record of all the movements you make with your credit card, as well as the bills you pay off (or don’t pay off). The higher your credit score, the lower interest rates you’ll receive on your mortgage.
This report is essential when it comes to applying for loans, as lenders will use it to assess whether they think you will reliably pay them back. Late payments are a red flag for lenders. If you know you have a bad borrowing history, don’t lose hope just yet. There are still plenty of options available to you – let’s explore them now.
Start building back your lending reputation
Now that you see how your credit history is going to influence your ability to get a loan, start working on bettering your score. The first thing you should do is create a budget that lays out your fixed expenses (rent, utilities, groceries, etc.) and the things that you could likely cut back on (going out to lunch or daily coffee trips). Then you can start to tackle your debts with this free money. Start with your largest debts first, and if you can, pay more than the minimum balance.
Of course, it will take time to rebuild your credit history so you’ll need to find a solution in the mean time.
Fortunately, you don’t have to be left out in the cold! Here at RedRock Mortgages, we’re specialised in helping those who don’t fit traditional lenders’ credit policies. We’ll help you obtain a bad credit home loan, a mortgage that’s made specifically for those with bad credit history. Contact our expert team today and see how we can help you
