Bad Credit

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.

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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?

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

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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.

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We handle the entire mortgage application process through to completion, liaising with your lender, solicitors and estate agents to remove the hassle from you.

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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.

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Bad Credit

How can bad credit affect your mortgage application?

What checks do lenders make?

Ways to improve your credit rating

How to get a bad credit mortgage

Step 1: Find a flexible lender

Step 2: Get help from a broker

Step 3: Apply for a government scheme

Step 4: Save a bigger deposit

Step 5: Be prepared

Step 6: Get the timing right