It is very frustrating if you finally want to have a new house but you can’t do so because you have a bad credit score. Each time you look for a mortgage loan, your application ends up getting rejected. They tell you that you are a huge risk as you have shown no capacity to repay the previous loans given your credit score.
You end up with a bad credit score for several reasons. You might have declared bankruptcy or defaulted on a loan. Missing or being late in payments has a bearing on your credit score, too. It might not be much, but it still has an effect. Credit cards and other loans that were not paid on time can also be a problem.
All of these things will determine your credit score and are reflected in your payment history. Your record through the years has corresponding points and it will determine your overall credit score.
What do you have to do?
As soon as you have seen your credit score, and it is really bad, make sure that the information is accurate. Check if you really had missed payments or you had defaulted on a loan. Sometimes, there could be inaccurate information that can be corrected over a certain period of time. Before you apply for a mortgage, you must already have them corrected.
There are also other things that you can do to slightly improve the score. You should be a registered voter. You should close off all old credit facilities like unused credit cards. Don’t make multiple credit applications. These are things that are within your control and could easily help you in increasing your credit score.
Is a right to buy mortgage possible?
The right to buy mortgage is a government scheme that started many years ago to provide everyone who wishes to own a property a chance to finally have one. There is a scoring system being followed to assess the risk and ensure that the applicant will pay the loan back. Before, having a bad credit score would immediately disqualify you. No lender, not even the government, would approve your application. However, some changes have been made to the policy to accommodate people with a poor credit score. As long as you are interested in getting the loan and you have proved that you have financial capacity to do so, you can give it a try.
You need not go through this process alone. There are experts who will help you in your quest to own a property. Just ask about the right to buy mortgage first before you finally start the application process.
AS A MORTGAGE IS SECURED AGAINST YOUR HOME OR PROPERTY, IT COULD BE REPOSSESSED IF YOU DO NOT KEEP UP THE MORTGAGE REPAYMENTS.
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