You've worked hard to build a solid career and earn a good income, but past financial difficulties have left marks on your credit file. The good news is your strong earnings could still help you qualify for homeownership, even if your credit history isn't perfect.
Understanding your position
Lenders assess your mortgage application using multiple factors, not just your credit score. Your income, employment stability, deposit size, and overall affordability all play crucial roles. Specialist lenders have increasingly catered to borrowers with adverse credit, recognising that past financial difficulties don't necessarily predict future behaviour.
If you're earning a substantial salary but have credit issues like missed payments or defaults, you're not alone. Many professionals face this exact situation, particularly those who experienced hardship during challenging economic periods.
What counts as 'bad credit'?
Bad credit can mean different things:
- Late or missed payments on credit cards or loans
- Defaults or CCJs
- Previous bankruptcy or debt arrangement plans
- High credit utilisation
- Too many credit applications in a short period
Bear in mind that not all bad credit is equal. A missed payment from five years ago carries far less weight than a recent default.
Strengthening your application
Build a larger deposit
The more equity you can put down, the less risky you appear to lenders. Whilst standard mortgages might require a 10% deposit, you may need 15-25% with adverse credit.
Demonstrate stable employment
Public sector workers, NHS staff, teachers, and emergency services personnel often benefit from their employment stability. Based in London, Public Sector Mortgages understands how secure government employment can strengthen applications despite credit issues.
Reduce existing debts
Use your good income to pay down credit cards and loans before applying. Lenders calculate your debt-to-income ratio, and reducing existing commitments can improve your affordability assessment.
Check your credit report
Request your statutory credit report from all three UK credit reference agencies. Look for errors and make sure all information is accurate and up to date.
Specialist lenders and adverse credit mortgages
High street banks typically use automated systems that may reject applications with adverse credit. However, specialist lenders take a more nuanced approach, considering your individual circumstances and current financial position. They understand that credit problems can result from one-off situations like divorce, redundancy, or illness.
These lenders may charge slightly higher interest rates to offset the perceived risk, but homeownership becomes achievable when it might otherwise be impossible.
Getting professional support
The mortgage market for borrowers with adverse credit can be complex. The experienced advisers at Public Sector Mortgages can assess your specific situation, identify suitable lenders, and present your application in the strongest possible light.
Your good income is a powerful asset. With the right approach and professional support, that credit history doesn't have to stand between you and your new home.
Contact us today to discuss how your income and circumstances could secure the home loan you need.
