How can bad credit affect your mortgage application?

Having a poor credit history makes you a riskier option in the eyes of mortgage lenders, and can affect:

Who will lend to you:
You’ll have fewer choices of lenders because you won’t meet the lending criteria for most.
How much you can borrow:
You may not be able to get the usual 3.5 times your salary, for example, if you’ve defaulted before, made late payments, or got too much other credit to manage.
The rate the lender will offer:
You won’t qualify for the best interest rates if you have bad credit, they’ll charge you extra to mitigate the risk.
how-can-bad-credit

What checks do lenders make?

When you apply for a mortgage, the lender will run a check on one of these databases to see your credit history:

Central Credit Register

This credit report shows the lender your past and current credit commitments, and the way you’ve managed them.

Your outstanding credit, other outgoings, income, and number of dependants, will help them assess your affordability, and affect the amount you could borrow.

You can find out more about credit checks, credit scores and your credit check rights in our guide: How to check your credit record.

Ways to improve your credit rating

There are things you can do to boost your credit rating and improve your chances of being approved for a mortgage:

Check your report:

Use the Central Credit Register website to see what the lender will see, helping you decide whether it’s the right time to apply for a mortgage.

Reduce the balance of your loans/credit cards/overdraft:

The less outstanding credit you have, the more you will be able to borrow with a mortgage.

Pay off any arrears:

And then wait to apply. You may need to wait as long as two years from paying off your arrears on an unsecured loan and four years for a secured loan to meet some lenders’ criteria, but check.

Check your credit report before you apply:

When you’re at the stage of applying/reapplying for a mortgage, check that your credit report has been updated with any changes e.g. arrears now cleared, loan balance reduced etc.

How to get a bad credit mortgage

Getting a mortgage with bad credit is more difficult, but there are steps you can take to improve your chances.

  • Step 1: Find a flexible lender

    Research different lenders’ lending criteria and choose one that’s less strict.

    For example, Finance Ireland is more flexible around previous credit issues, but they don’t offer a quick fix.

    Arrears on unsecured loans must be more than two years ago, and more than four years ago for secured loans.

  • Step 2: Get help from a broker

    You could use a mortgage broker (mortgage credit intermediary) who has a good knowledge of the main lenders and their criteria, to find you a suitable lender.

    This is likely to save you time, and avoid additional credit checks that can damage your credit record further.

    Too many credit checks in a short space of time raises the alarm to other lenders as it shows you’re struggling to get credit.

  • Step 3: Apply for a government scheme

    The Rebuilding Ireland Home Loan is a mortgage scheme that can make buying a home more affordable for first time buyers, providing you meet the eligibility criteria.

    One of the key criteria is proving that you have been declined for a mortgage by two banks or building societies.

    The two fixed rate mortgage options lasting 25 or 30 years, make it easier to budget for your payments, as they won’t change for the entire mortgage term.

    To apply for the Rebuilding Ireland Home Loan, you’ll need to complete an application on the Rebuilding Ireland website.

  • Step 4: Save a bigger deposit

    The more you can save up, for example by reducing your spending, the easier it will be to apply for a mortgage.

    Our mortgage deposits guide has tips to help you cut costs and save for a deposit.

  • Step 5: Be prepared

    Don’t apply for a mortgage or approval in principle until you’ve done your preparation.

    Here’s how to prepare for a mortgage application.

  • Step 6: Get the timing right

    Waiting for as long as possible to apply after clearing any arrears, could increase your likelihood of getting:

    • Approved by more lenders
    • Approved for more credit
    • A better interest rate

    A cheaper interest rate will make payments more affordable, and you could even overpay your mortgage.

Why choose platinum mortgages?

No matter your circumstances, our in-house credit specialists can help everyone get a mortgage, even if you have a history of adverse credit.

Poor credit experts

No matter your circumstances, our in-house credit specialists can help everyone get a mortgage, even if you have a history of adverse credit.
We will recommend the perfect mortgage for your needs and provide you with an Agreement in Principle, if you are looking to buy a new property.

No obligation advice and quotes

We will recommend the perfect mortgage for your needs and provide you with an Agreement in Principle, if you are looking to buy a new property.
We handle the entire mortgage application process through to completion, liaising with your lender, solicitors and estate agents to remove the hassle from you.

Stress and hassle free

We handle the entire mortgage application process through to completion, liaising with your lender, solicitors and estate agents to remove the hassle from you.
As a responsible broker, we want your mortgage to always be the best fit for you. So when it’s time to review it, we will be here to help.

With you all the way

As a responsible broker, we want your mortgage to always be the best fit for you. So when it’s time to review it, we will be here to help.
We provide tailored life and home insurance solutions, so you can be assured that your loved ones and possessions are protected.

Protecting what matters most

We provide tailored life and home insurance solutions, so you can be assured that your loved ones and possessions are protected.
Apply for a mortgage at any time of the day through our 24/7 MortgageApplication portal.

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Stay up to date on the progress of your mortgage application via your own portal.

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Our motto is ‘straight-talking advice’ and we live by that. No jargon, no fuss, no stress. We’re passionate about getting you the perfect mortgage with the best rates, no matter if you are; buying your first home, remortgaging, moving home, purchasing a second property, or you have a history of bad credit. Our job is to help you buy your dream home.

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WARNING: IF YOU DO NOT MEET THE REPAYMENTS ON YOUR CREDIT AGREEMENT, YOUR ACCOUNT WILL GO INTO ARREARS. THIS MAY AFFECT YOUR CREDIT RATING, WHICH MAY LIMIT YOUR ABILITY TO ACCESS CREDIT IN THE FUTURE.

WARNING: IF YOU DO NOT KEEP UP YOUR REPAYMENTS YOU MAY LOSE YOUR HOME

If your mortgage is ever on a variable rate:
WARNING: THE PAYMENT RATES ON THIS HOUSING LOAN MAY BE ADJUSTED BY THE LENDER FROM TIME TO TIME.

If your mortgage is ever on a fixed rate:
WARNING: YOU MAY HAVE TO PAY CHARGES IF YOU PAY OFF A FIXED-RATE LOANEARLY.

If your mortgage is on an interest only term:
WARNING: THE ENTIRE AMOUNT THAT YOU HAVE BORROWED WILL STILL BE OUTSTANDING AT THE END OF THE INTEREST ONLY PERIOD.

If your mortgage is an equity release mortgage and is being used for debt consolidation purposes:
WARNING: THIS NEW LOAN MAY TAKE LONGER TO PAY OFF THAN YOUR PREVIOUS LOANS. THIS MEANS YOU MAY PAY MORE THAN IF YOU PAID OVER A SHORTER TERM.

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