Mortgage broker Habito to give free advice worth £500 to buyers with bad credit scores

WOULD-BE home buyers struggling to get on the property ladder because of poor credit can now get free mortgage advice.

Online mortgage broker Habito has teamed up with bad credit adviser Impact Specialist Finance to dish out free help worth over £500.

Having a poor credit rating can badly impact your chances of securing a loan or mortgage.

It can also cost home buyers hundreds of pounds if they end up seeking specialist advice on how they can get their first home.

Habito says the new partnership will help those battling to overcome serious credit issues, such as missed payments or county court judgements (CCJs).

In particular, the chances of these impacting your rating are greater if they happened in the last six years.

How to find a mortgage if you've got bad credit

IF you're struggling to secure a home loan due to poor credit history, then here are some options.

You may find your options limited if you have a low credit score.

Some black marks will impact your likelihood of being eligible to borrow and can last for up to six years – this can include late payments and County Court Judgements (CCJs).

But all is not lost if your credit score is less than favourable and here we reveal the help that might be available to you.

As an alternative you can apply for a specialist lender, who is more likely to accept people with a poor credit rating.

One thing to note is that these lenders do charge a higher-than-average interest and usually require a larger deposit.

You may need to have at least a 20 per cent deposit saved to apply.

If you'd rather avoid this, you'll usually be required to maintain a clear sheet of no debt and missed payments for at least 12 months.

This must also go hand-in-hand with all debts being paid off and making sure all payments are up to date.

Those with bad credit can use a broker matching service like Online Mortgage Advisor or Just Mortgage Brokers, or go direct to a specialist lender like Accord, Aldermore or Metro Bank.

This article by Which? highlights a number of specialist lenders, how much you will need saved and who they accept.

Impact’s standard fee for mortgage advice is £574 but this has been waived for Habito customers.

As with any financial commitment, there are pros and cons when considering a mortgage.

It's important to make sure you'll be able to afford the repayments and be fully aware of what you're signing up to.

Daniel Hegarty, founder and CEO at Habito said: “We exist to set people free from the hell of mortgages and we’re constantly working on enabling more and more homeowners have an easier mortgage experience.

“While we’re currently unable to help those with serious credit issues, we want to be able to provide the best alternative we can.”

How to boost your credit score

IF you've got a bad credit history, you might find it harder to get accepted for a loan or mortgage.

If that's the case then there are steps which you take to help improve your rating.

Remember that a missed payment or CCJ can stay on your record for up to six years, so keep an eye on your profile to make sure it gets updated once you're paid your debt off.

  • Get on the electoral register. This proves who you are and where you live meaning it's easier to get credit if you're on the list. You can sign up for free by registering to vote. Recent research shows this can boost your score by as much as 50 points.
  • Don't make too many credit applications. Making lots of requests in a short period of time can be seen as a sign of financial distress – and each application will be recorded on your file. Use a "soft-search" eligibility calculator to show how likely you are to be accepted. This won't appear on your record, so it won't impact your score.
  • Always pay your bills. Late payments are also recorded on your file. This means it's important to keep on top of your bills, including including utility and credit cards. Getting into arrears is a sure-fire signal to lenders that you might not be the best at paying on time.
  • Pay down your debt. If you have a large amount of debt, this could reduce your chances of get accepted for a loan or mortgage. It's a good idea to try and get debt-free – and stay debt-free – for at least 12 months before even considering applying for a loan or credit card.
  • Use a credit-builder credit card. These cards tend to have high interest rates compared to normal cards but if you can show you're a responsible spender with them, it can improve your chances in the eyes of lenders.

Dale Jannels, managing director at Impact Specialist Finance said: “Impact have worked diligently in this sector for many years and we are always keen to help clients achieve their dream and put the troubles of the past behind them.

“We see many clients who, due to their credit history, felt that they either couldn’t get a mortgage or remortgage from their current lender.”


Looking to buy your first property? Here's everything you need to know about what credit score you need to buy a house.

Meanwhile, did you know having a bad credit score could push up your insurance bill by £1,100 a year?

And as more 100 per cent mortgage loans continue to appear on the market, we've looked at how a bad credit rating can impact your chances of getting one.

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