Can I remortgage with bad credit?

Arguably, one of the best things you can do is to improve your credit score. Improving your credit score takes time and effort, it’s not something that happens quickly. You need to keep working at it to see results. If you are taking the right steps, you will soon begin to see small improvements.

We recommend speaking to a qualified advisor regarding putting together a plan to improve your credit score. There are some immediate actions you can take to put your credit rating back on track. These include:

1. Check your credit report from each of the UK’s three credit reference agencies – Experian, Equifax and TransUnion. Check that the details they hold are correct. Each may hold different details, so get your report from all three.
2. Regularly update the personal details held on your credit report, such as your address and email address.
3. Make sure you are registered on the electoral roll.
4. Keep track of your credit card balances; ideally try to always pay more than the minimum to drive the balance down. Take care not to go over your agreed credit limit. If possible, never utilise more than 50% of what you have available.
5. Make sure you pay your bills on time and manage your monthly income.
6. Cancel all lines of credit that are not in use, such as store cards or ‘just in case’ credit cards.
7. Build up a positive credit history by utilising a dormant credit card to buy petrol or groceries. Make sure you pay it off in full every time, don’t build up additional debt.
8. Resist the temptation to take out payday loans. They are considered to be a red flag, showing that you cannot manage your finances month to month.

For more suggestions as to how you can repair your credit rating, check out our simple tips page.

Every application for a mortgage or a remortgage is subject to an affordability assessment. This is the case no matter what your credit status might be. Potential lenders look at income versus outgoings, taking everything into account to understand your affordability. Since June 2014, the FCA’s recommendation is that the debt-to-income ratio should be no higher than 45% for an offer of a mortgage or remortgage to be made.

MoneyHelper have a great budget planner tool that can help you understand your income and expenditure.

In many cases, to get a remortgage deal you will have to go to a lender that specialises in mortgages for defaults.

The terms you are able to get for a remortgage with defaults may be influenced by:

• the amount of money in the default,
• how long ago the default notice was served,
• and if there is any amount still outstanding.

Read our guide about getting a mortgage with a default.

A County Court Judgement is one of the more severe adverse credit events that can be registered against your name. You will find it more difficult to apply for a mortgage with one on your record. However, it is possible to get a remortgage, even if you have one or more CCJs on your credit file.

Every lender will have their own criteria for assessing your case. They will take into consideration all these factors in combination to make a lending decision:

• when the CCJ was registered,
• the number of CCJs,
• how much money is/was owed,
• if it was satisfied,
• and the age of the CCJs.

Read our helpful guide about getting a mortgage with a CCJ.

It is entirely feasible for people with a DMP to successfully apply for a remortgage on their property. You might have to go to a little more trouble than for a standard remortgage. With access to the right lender, you should be able to find the right product to meet your needs.

A remortgage could be a useful way to pay off existing debts and replace them with a new mortgage. The interest rate on a remortgage could be significantly more favourable than that on any unsecured loan. Settling the debts named under a DMP would help improve your credit rating in the future.

Read our useful guide on getting a mortgage with a DMP.

Trying to obtain a remortgage after completing an Individual Voluntary Arrangement (or IVA) can seem like a huge challenge. If you are with a high street lender, it’s likely they will decline your application for a remortgage.

Fortunately, there are a range of specialist lenders who cater to people who have completed an IVA. The key factor with getting a remortgage after an IVA will be affordability.

Read out latest guide on getting a mortgage after an IVA.

If you have been declared bankrupt in the past, and the bankruptcy has been discharged, you should be able to apply for a remortgage. Your options could be restricted depending on a few factors.

You will need to work with a specialist mortgage broker, who will be able to assess your circumstances and advise you on what will be the right option for you going forward.

Read our guide on getting a mortgage after bankruptcy.