Credit Problems?

I've had credit problems!

Not everything in life goes according to plan, and sometimes it’s easy to fall behind on payments on credit cards, loans or both. Sometimes, you can even end up with markers on our credit file due to things beyond your control. Various life events can cause cash to become tight resulting in late payments, defaults or even County Court Judgments.

Having bad credit doesn’t automatically mean you shouldn’t be able to own your home. More and more lenders are offering mortgages to people with less than perfect credit histories. It may mean that for a while you’ll have to pay slightly more for your mortgage as lenders who specialise in this area often charge higher interest rates, but our Brokers will work on a plan for you to get you placed with a mainstream lender when the time is right.


At Wallace Home Finance, we understand the stresses and strains that life puts on the finances. We promise NEVER to judge the rights and wrongs of anybody's personal situation, we only deal in the facts and we'll do our best to source a suitable mortgage and protection solution for you.

What is a mortgage?

A mortgage is a loan made by a bank or building society to enable you to buy a house or other type of property. The length of the mortgage will usually be anything up to 40 years for a standard repayment mortgage. The shorter the term, the more you will repay each month, but you will obviously pay off the mortgage more quickly and pay less in interest on the term of the loan. When you sign the mortgage agreement, you are agreeing to give the property as security for the loan.


The amount you borrow is referred to as the capital sum and the lender then charges you interest on the amount you have borrowed.


When it comes to monthly repayments, these are almost always interest and capital, referred to as a repayment mortgage, or just interest, referred to as an interest-only mortgage. In addition, some lenders offer mortgages on a part-repayment and part interest-only basis.

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What could the problem be?

There are various things lenders can do to attempt to recover their debt from you when you've missed payments on their lending.


They could serve you with a default notice which includes details of what payments you missed and how long you have to pay. Your lender has to give you at least 2 weeks to pay. After 2 weeks they can send you a letter of claim. If you make the missed payments, your creditor won’t take any further action.


Alternatively, you might have a county court judgment (CCJ) against you if you owe someone money and a court has ruled that you have to pay it back.


Your credit rating could be affected if you have a defualt or CCJ against you. This means it might be difficult for you to borrow money or get credit, for example from a bank or a shop.


Defaults and CCJ's will appear on your credit report - this is the information that a credit reference agency provides to the company you want to borrow money from. The company will then use the information to decide whether to lend you money.


This is where your Mortgage Broker fits in. Although lenders are all bound by the same general principles and criteria, there are slight variations in the way they apply them. So it really pays to work with a Mortgage Broker. Their knowledge of the market and understanding of the approach adopted by individual lenders means they can help you present your application in a positive light, to the right lender, saving you time and stress.

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Your Credit File

Understanding how lenders use your credit file works is really important before you make a mortgage application. It’s important to understand that mortgage lenders look at far more than your score. 


A potential mortgage lender will often consider the information on your full credit file, which includes details of your payment history on your credit accounts. 


They’ll also look at things such as how much credit you have available to you, how close and how often you reach the limit on your credit cards or overdraft and whether you have missed any payments in the past.


The three main credit reference agencies that lenders use are Experian, Equifax, and Transunion trading as Credit Karma. 


Our Brokers can guide you through the credit file maze and explain to you how to get a copy of your file, interpret the detail and explain how lenders will look at it.

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The bigger the deposit, the more likely a lender is to lend to you

Having a good deposit matters even more when you've had credit problems! The more you can put down the better and lenders who offer mortgages to people with poor credit histories, often want at least a 15% deposit.


Typically the more you can put down, the more likely a lender is to take you on and the lower the interest rate you are likely to be offered.


It's not all about your own savings, you may also be able to use money gifted from other family members such as your parents or grandparetns to help with the deposit.


This is where our Brokers' knowledge of the marketplace really helps. They will be able to provide examples that illustrate what you’d pay, depending on how much deposit you’re able to provide.

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Bad Credit Process

Step  2

Get your credit file and Submit your financial information

Step  3

We'll find a suitable lender based on your circumstances

Step 4

Become a homeowner like everyone else!

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