Do you have a poor credit score? It doesn’t mean home ownership is out of reach

Posted on

Credit scores are used by mortgage lenders to assess the risk you pose. However, a poor credit score doesn’t automatically mean you can’t take out a mortgage to purchase a home.

According to a survey published in MoneyAge, poor credit scores have deterred 1 in 10 Brits from applying for a mortgage. Yet, while a poor credit score can make securing a mortgage more difficult, there may still be options available.

In some cases, you may still be able to move ahead with home ownership plans now, while in others delaying plans while taking steps to improve your credit score can mean you’re in a better position in the future.

If you’re hoping to buy a property and are worried about the effect your credit score could have, read on to find out why credit scores are important and the steps you could take.

Credit scores are used by lenders to assess the risk of lending to you

Your credit score is a tool used by lenders to assess how risky you are to lend to and the likelihood that you’ll default on repayments.

As a result, it can have a direct effect on the outcome of credit applications, including mortgages.

Credit scores are calculated using information from your credit report, which lenders may also review. This information includes things like your payment history, current levels of debt, and how long you’ve held accounts for.

Red flags on your credit report include missed payments, individual voluntary arrangements, county court judgments, and bankruptcies. If any of these are on your credit report or your score overall is low, you may put off applying for a mortgage believing you won’t be accepted.

Here are some things you can do to improve your chances.

5 things that can help you secure a mortgage with a poor credit score

1. Review your credit report

If you’re thinking about applying for a mortgage, whether right now or in the future, one of the first steps you should take is to review your credit report.

There are three main credit reference agencies in the UK – Equifax, Experian, and TransUnion – and you can review your own report for free. Viewing your credit report will not harm your credit score and you can usually access it online.

Despite this, the survey found that 62% of people do not know what their credit score is. Without this information, it can be difficult to assess how it’ll affect your credit application. Your score may not be as bad as you think.

Mistakes on your credit report, such as wrong addresses, can harm your score. So, it’s worth going through the report carefully and contacting the agency if any of the information is incorrect.

2. Look at what steps you can take to improve your credit score

As well as flagging up mistakes, reviewing your credit report can highlight ways to improve your score.

Improving your score means you have a better chance of your application being successful and accessing a more competitive rate of interest, but 60% of people said they’d never taken any steps to do so.

There may be simple things you can do to boost your score, for example, registering on the electoral roll. Other steps, such as reducing the amount of available credit you use or paying off other forms of borrowing can also help.

If you have any red flags on your report, they are often removed after six years. So, if you’re nearing this time, waiting to apply for a mortgage can make sense.

It can take several months for changes to show up on your credit report, so this is a step you should take sooner rather than later.

3. Put down a higher deposit

Traditionally, aspiring homeowners have needed a 10% deposit to purchase a house, and some options mean required deposits are just 5%.

However, a poor credit score means you may be viewed as a greater risk to mortgage lenders. So, having a higher figure to offer as a deposit can help increase your chances of securing a mortgage.

This is because you may be borrowing less and the equity you own will be higher. This can provide the lender with greater security if you default on payments.

4. Find the right lender for your circumstances

There are a lot of mortgage lenders to choose from, and it’s worth spending time finding the one that’s right for you before you apply.

When you apply for a mortgage, the lender will usually carry out a hard credit check, which shows up on your credit report. Several hard credit checks close together can harm your credit score and put off potential lenders as it suggests you’ve increased your credit commitments.

Lenders all have their own criteria, and just because one lender may reject your application doesn’t mean they all will. There are lenders without a high street presence and specialist lenders that may suit your needs.

As a result, it’s important to understand a lender’s criteria and whether you’re likely to fall into this. We’re here to help you understand which lenders are most likely to say “yes” to your mortgage application.

5. Be prepared to accept a higher rate of interest

The interest rate of a mortgage affects your monthly repayments and the overall cost of borrowing.

If your credit score is low, you’re likely to be offered an interest rate that is higher than the market average. Again, this is to reflect the higher level of risk the lender is taking. Be prepared to accept this and ensure that repayments would still be affordable.

Keep in mind that the interest rate you accept now isn’t what you’ll pay for the entirety of your mortgage.

By the time your initial deal ends, your credit score may have improved, especially if you’ve kept up with repayments, and you may be able to access a more competitive rate.

Speak to us about your mortgage needs

If you want help applying for a mortgage and understanding what your options are, please contact us.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.


We aim to keep our clients up to date on interesting and relevant financial news.

You can sign-up to receive our monthly newsletter by email, even if you’re not yet a client. Sign-up using the form below.

Client testimonials

I have always found Black Swan to be caring and understanding of my quirky lifestyle. I always feel they try to get me the best returns while respecting my current needs.

Sally Muir

A client since 2011

We would be very happy to recommend the support and service we receive.

Valerie Locks

A client since 2010

I have always been completely useless regarding finance - thankfully our financial adviser is not! I've retired with far more than I ever expected and investments continue to grow safely. So - thank you!

Bernadette Jane Warner

A client since 2000

Very happy with the professional service I have received and feel a lot happier now with my finances put in order.

Martin Field

A client since 2011

Julie Cooper was recommended to me by a work colleague. She has been very helpful, professional and has explained everything well. I would definitely recommend her services to anyone else who are interested in a financial review.

Steven Rooke

A client since 2018

…Service has been first class.

Hugh Fells

A client since 2012

My face to face meetings with Rob Young and Jessica Lyons have always been very open and understandable. My questions have been answered clearly and I have left feeling that my financial matters are in good hands.

Sandra Jack

A client since 2000

[A] safe pair of hands in a complex financial world.

Gary Middlehurst

A client since 2003

A reliable company with good communication skills and good knowledge of the financial markets.

Alan Evetts

A client since 2014

Maureen Pembridge is a long-time trusted advisor to our family. The market might fluctuate but her attention to detail is consistent.

Linda Burnard

A client since 2000

I am pleased to recommend Julie as a trustworthy financial advisor. She explains financial jargon in plain language, and always listens carefully to my particular financial needs and has helped me make the best of my savings.

Carolann Samuels

A client since 2010

I have always been satisfied with the way that Black Swan has handled my account. And I have always found the staff very helpful whenever I need to call the office.

Robert Anthony Matthews

A client since 2012

An excellent personal service from a person I know and trust.

Michael Dalton

A client since 2010

I am getting a very good services from Black Swan, they have got my investments sorted out which was in a bit of a mess.

Roy Jakens

A client since 2012

A good, efficient team providing clear ideas to shape a winning strategy.

Adrian Michael Levenstein

A client since 2011

Black Swan is a company to be trusted, with friendly staff and professional advisors.

David Brian Jennings

A client since 2017

I have been with Black Swan for many years. I have never wished to change anything. They give a good straight forward service.

Martin Barrett Brooks

A client since 2010

Andy Peters has been invaluable in firstly combining several pension pots and then giving excellent investment advice. It has given us a great deal of comfort to know that our financial affairs are in such good hands.

James Guillum Scott

A client since 2014

I find my financial advisor easy to talk to and feel that she understands my lifestyle. She is always available for help when I need her and explains in words that I can understand.

Margaret Ena Glasgow

A client since 2000

Andy is a first rate Director, excellent communicator and leader.

Ross Perry

A client since

Black Swan Financial Planning and Andrew in particular, are very clever at working out how risk averse we are, and coming up with solutions that we feel comfortable with. We are happy in the knowledge that we can continue to enjoy a comfortable retirement. Andrew Peters is a very, very friendly person who is great to chat to and easy to deal with. He explains things very clearly in layman’s terms, and if we still don’t understand, he explains it until we do!

Alan & Jane Dyer

Clients since 2012

We have always found Rob [Young] to be very approachable and knowledgeable. We have every confidence in the advice given and feel comfortable with the decisions we’ve made. There are certain opportunities that we wouldn’t have known about if Rob hadn’t brought them to light, which makes the advice good value for money as far as we’re concerned.

Peter & Pauline O’Halloran

Clients since 2013

Rob [Young] is extremely knowledgeable. I knew nothing about the different types of trusts which will not only secure my income in retirement, but also leave a legacy for my children. I’m glad that I sought his advice when I did.

Sarah Wilson

A client since 2015

I am extremely happy with the service afforded to me by the company and my adviser Julie Cooper.

Geoff Coxell

A client since 2010

My wife and myself have been dealing with Black Swan for a number of years. We have met with different representatives from the company over the years and have found all very helpful in their own way. We met with James [Anderson] a few years ago and found him very helpful and knowledgeable. He keeps in contact with us on a regular basis. We find the Company information very helpful and we feel very secure with our finances.

Andrew Kirchen

A client since 2015

I have always found my adviser to be easy to contact, very professional in his approach, yet friendly and understanding. I have a sense of an experienced company behind him, really on the ball financially and with good standards.

B McBean

A client since 2011

Partner with the most reliable and experienced team of advisers

Enter your details & we'll be in touch to discuss your needs.
Alternatively, contact us directly and speak to a member of the team.

    Subscribe to our newsletter