How to remortgage with bad credit

Can you remortgage with bad credit?

While having a poor credit history can make it more challenging to secure a favourable remortgage deal, it is still possible to remortgage with bad credit. Lenders typically view applicants with lower credit scores as higher risk, resulting in less competitive interest rates and fees.

What causes bad credit?

Factors that can contribute to a poor credit score include missed or late payments, high outstanding debt, County Court Judgments (CCJs), and bankruptcy. Lenders use credit scores to evaluate an applicant’s creditworthiness and ability to manage repayments.

What is a bad credit score to remortgage?

Credit scores range from 300 to 850, with higher scores indicating better credit health. While there is no definitive cut-off, scores below 600 are generally considered poor or bad credit by most lenders. However, some specialist lenders may accept lower scores.

Can we remortgage if one of us has bad credit?

If you are remortgaging jointly, the lender will consider both applicants’ credit histories. The applicant with the better credit score may improve your chances of approval, but the one with poor credit could still impact the interest rate and terms offered.

Tips for remortgaging with bad credit:

1. Check your credit report for errors and address any issues before applying.
2. Consider using a specialist bad credit mortgage broker to access lenders more willing to consider applicants with poor credit.
3. Provide evidence of improved financial behaviour, such as consistent employment and on-time bill payments.
4. Be prepared to pay higher interest rates and fees, or accept a lower loan-to-value ratio.
5. Explore options like secured loans or remortgaging with your current lender, as they may be more lenient.
6. Build your credit score over time by making payments on time and reducing outstanding debts.

While remortgaging with bad credit can be challenging, exploring your options and taking steps to improve your credit profile can increase your chances of securing a favourable deal.