Mortgage with a really terrible credit score

[hellogoodbye123456]

DP and I will have enough saved in two years time for a 10% deposit on a house.

However we both have awful credit scores. We will be completely debt free by the end of this year and obviously have been trying to improve our scores and will continue to do so.

Any tips on making us more likely to be accepted? Should we save for another year for a higher deposit?

I would have thought your credit score would be OK in two years' time, wouldn't it? You need to check all the things you should do - register to vote, use a credit card and pay it off in full each month, etc.

It takes six years to reinstate a credit rating. Sign up for all the free credit report checkers like Clear Score which will tell you where you're falling down and how to improve your score.

Thanks @HollowTalk

DP had accounts in default from 2014 and 2015 which are still affecting it when we have checked on clear score and Experian however I think these are removed after 6 years so we might be fine in two.

I'll look into a credit card thanks, I couldn't get accepted for one last time I tried

Yes we are on the electoral roll at house just now (private rent)

X post @fairydustandpixies

Thank you

Have you looked at your credit reports? It takes six years for adverse data to drop off. So identify when your most recent defaults, CCJs, and/or late payments are and plan to buy six years from then.

Maybe a year earlier than that date will be possible if what’s left by then is very minor adverse information. However you definitely won’t get a mortgage with “terrible” credit.

If you can tell us more specifically about hat kind of adverse info is on your files, the quantity of adverse info, and dates, we can probably advise better.

X post.

So defaults for your partner dates no later than 2014 and 2015? I hat about your file?

Get a decent independent mortgage broker, they’re worth every penny. It was very old (nearly 6 years) but I managed to get a mortgage with a high street lender whilst still having a CCJ on my file some years ago now, with a 10% deposit. Brokers have access to info and products you won’t find via google, and can check lending criteria without leaving a trace on your credit file initially. Find a good one, and be 100% transparent about your situation.

You can get credit cards intended solely for people with bad credit. You'll get a tiny credit limit and pay an extortionate amount in interest if you don't clear the balance every month but used correctly they'll help rebuild your credit history. I had one with Aqua and I think my limit was £200 and the interest rate was 40%. So long as you pay the balance in full each month then you don't get charged any interest. I used to pay for my first food shop.of the month on it, then hide it at the back of my purse and not use it again into the following month. Set up a direct debit to pay the balance in full and you'll.never have the problem of forgetting to pay it off. Have a look at www.moneysavingexpert.com/credit-cards/bad-credit-credit-cards/ for a list of possible cards.

I also 100% recommend a decent independent mortgage broker. Mine managed to get me one with a high street lender with two recent defaults on my credit history plus being only a couple of months into a fixed term employment contract following.a period of unemployment. I didn't think anyone would touch us with a barge pole!!

Just before lockdown we manager to get a deal at 95% ltv with not a great credit score. I second the poster who said get a good broker. They know which lenders to approach and which ones not to bother with.

One thing to do in the next two years is to keep an eye on the housing and mortgage markets. At the moment, small deposit mortgages are difficult or impossible to come by and are more expensive than having a bigger deposit.

Make sure you look into and cost up the differences between 5, 10, 15, 20% deposits. Of course, the sooner you buy, the sooner you can stop paying rent, so that's also something to factor in, along with any changes in house prices - up or down.

Moneysavingexpert has a list of tips about improving your chances of getting a good mortgage deal and also produces a downloadable FTB guide.

www.moneysavingexpert.com/mortgages/boost-mortgage-chances/