If you have ever missed a payment on your loan or your credit card you will probably find that you have a bad credit rating.
There are however financial services especially for those who struggle with keeping their finances in order. Perhaps you are self employed and are often waiting for payments and therefore find it hard to keep on time with paying your bills or perhaps you take out new loans just to pay off old loans as your salary just isn’t enough to cover it all, To the banks this will make you seem as though you are not able to manage your finances very well and so you might find yourself suddenly unable to have a standard bank account.
Some people also find they have bad credit rating if they have never borrowed money at all as their credit history is practically non existent, which makes it difficult for a lender to analyse whether you would be able to organise your debts and repayments on a loan or a credit card.
Whats on offer:
There are thousands of people in the UK who don’t have a bank account, as they don’t realise these bank accounts are available to them, But the fact is most banks have accounts especially designed for those that have trouble getting a standard bank account because of a poor credit rating.
There are basic bank accounts which let you manage your money in a simple way, giving you the ability to use the bank to store your money and make payments and there are also current accounts which are often called guaranteed bank accounts.
The Basic Bank Account.
The basic bank account is available to everyone but especially to those who have been refused a standard account due to having a poor credit rating and it comes with no costs whatsoever as long as you always make sure you have money in there to cover any direct payments. Its great as it lets you have access to banking facilities which help you to manage your finances, These accounts can prevent you getting into any debt as you just have a basic debit card which only allows you to take out money and to pay for your goods as you go, The only restrictions are that you won’t be able to get any credit cards or any overdraft facilities on your basic account.
Most basic accounts are usually free of charge with no application fees or monthly fees but you need to be careful as if you don’t have enough money in your account to pay outgoing direct debits you will be charged an unpaid fee which could be up to £25, so you need to learn to manage your account and always leave enough money in the account to cover outgoing payments, If you manage it well its a great way to keep your finances safe and in order.
The current accounts usually have an application fee and also a monthly maintenance fee, There is no credit searches done with these accounts which is why they are often called guaranteed accounts, and they are usually favourable to the high risk borrowers who have previously been declared bankrupt.
They are great for getting people back into the banking system where they would otherwise be refused so that they can control their finances without the risks of slipping into debt again. With a current bank account salaries can be paid directly into the account or pensions etc and the account holder will be able to manage their finances much easier with the ability to pay direct debits and a pre paid debit card will be provided allowing one to pay for goods and services online and in shops without going overdrawn, these cards are accepted by most places in the UK and also abroad too. The current accounts also come with your own personal banker which is great if you might need to get advice and get help with managing your current financial situation.
Why didn’t i know about these bank accounts?.
The banks do not publicise the bad credit bank accounts so much as they don’t really make any profit from them unless you get charged for not having enough money in your account to cover your existing direct debits as there is are overdraft fees that they can claim. If anything it just costs the banks money with all the administrative fees that are involved in providing these accounts.
Improve your credit rating
There are credit builder cards now available which help to give you access to credit and as long as you make your repayments on time every month you will prove that you can manage your money responsibly and build up your credit rating this way. However they do have high rates of interest but if you can pay the balance every month you won’t need to pay any interest at all. They credit limits are low but if you manage it well then you can apply for a higher credit rate later on.
To fully rebuild your credit rating depends on your bad debt history. It usually takes around 7 years but could be up to 10 years to fully rid yourself of it from your credit file.
Here are some ways to improve your credit rating.
Make sure you are registered on the electoral roll.
Close all your unused bank accounts.
Set up a direct debit on all your credit cards to prevent missing any future payments.
Always keep your current name and address details up to date.
If you have never had a credit card before, Take out a credit card and make sure you make the repayments regularly to prove you are a responsible credit card holder.
To be in long term employment.
Have a fixed phone line rather than just a mobile phone.
Having a long-term bank record with the same bank looks better than if you keep changing your banks too often.
Don’t apply too quickly for each loan or credit card as each time you get refused it will be a negative impact on your credit file and makes you look as though you are desperate for money.
Moving home is always a big deal and is not to be undertaken lightly. If you really dont have to move to a different location but just require more space or different or more modern facilities to make your home more comfortable then you could look at improving your current home instead of moving.
Making improvements even if some construction is involved is always going to be easier than moving home.
To get more space you could build an extension, conservatory or do a loft conversion. To make your home feel more spacious you could knock through walls and redesign your internal living space. Similarly in your garden you could redesign the layout and add a patio or deck.
The ideas are endless and today there are many TV programmes and websites to help you do all of this. You probably already have ideas of what you would like to with your home and garden. You dont have to do it all at the same time but can make plans to improve your home in stages. All you need is the money and the will to see it through.
If you are going to make major alterations then you will need to hire a professional such as an architect to help with the design and submit plans to the council if required for planning or building regulations approval.
If you need cash or loan to get you started or for the whole project then call one of our loan advisers now to get some expert advice on how we can help you. Even if you have problems with your credit status we should still be able to find you a solution.
There are lots of different reasons why you might want to improve your property. However the result of anything you do should always increase the value of your property and you need to have this in mind as an objective at all times.
If you sell soon after making the improvements dont expect the increase in the price of your home to necessarily cover the cost of the improvements. However the fact that your house now has the improvements will mean that when you want to sell your home it will be more attractive to buyers.
Comfort and space are two of the major reasons for improving a home. Both can be driven by a desire to have a better lifestyle, but more space may become a necessity as a family increases in size.
May be you just want to add value to your property and this can be achieved by providing more space. For instance if house prices are rising and you add an extra bedroom then there is a very good chance that you will get your money back and more.
More Space Please
Any improvements that can add more space to your property will also add the most value.
A Home Extension is the favourite way to add space and if you build something that fits in closely with the existing character of the property then you will reap more rewards. To get an idea of what it might cost have a preliminary chat with an architect who should be able to help provide a ball park figure.
A Loft Conversion is also a very popular way of adding room to your home and it is also one of the most cost effective. They are normally much simpler and cheaper than building an extension and will add more value for the same amount invested. A well-designed and carefully constructed loft extension may add significant value to your home.
Not all properties can have a loft conversion, because there may not be enough space below the roof. Older properties tend to provide better opportunities as more modern houses tend to have a roof with a less steep pitch and they are normally lower anyway. Check with an architect first.
A Conservatory can be just about the cheapest way of providing more space and it is a relatively quick solution too. They look best and will add more value if they fit in nicely with the external décor of the house and complement the garden as well.
They can be quite cheap or even expensive but be aware in this market and make sure you buy from an established brand. Also shop around for a good deal and to get exactly what you want, because there are many different styles available.
A Garage, although not really living space, will give you a lot more storage and indoor working space as well as somewhere to park your car.
Make Yourself Comfortable
There are many ways in which you can make your home more comfortable and they will add value, but some more than others.
If you do not currently have central heating in your home then you should get this installed as a priority. It is the fastest way to make your home more comfortable and buyers will always expect to find it in any house they view.
A new kitchen or bathroom will always increase the comfort of your home and there are lost of designs to choose from. Visit any kitchen or bathroom showrooms to see what is available or even visit a show house in a nearby residential building project to check what the property market currently expects to find in a new home.
You could also consider double-glazing but even though it is now expected in most homes it will not be very cost effective unless the current window frames really need replacing. Once again cost vary considerably so show around to get a good deal from an established company.
Whatever improvements you do make sure you get what exactly what you want and that you do them for the right reasons. When it comes to selling they will add value and make your home easier to sell.
Let To Buy mortgages allow you to borrow money to buy a new home to move into and let you keep your old home to let out to tenants. Your new home can be any where in the UK. This type of loan basically means that you can move without selling your existing home first.
Lenders are continuing to be more flexible in their approach and are coming up with more and more ideas to help the homebuyer and those who wish to invest in additional property.
The rent you get from letting your old home must be somewhat greater than what you are currently paying on the mortgage on your old home. This is to cover any problems you might have in getting the rent paid by your tenants.
If you are buying property to let and need a let to buy mortgage or just some questions answered then call us now. Advice from our brokers is free and impartial and you will be under no obligation. They are here to help you.
Let To Buy Mortgage Conditions
Most lenders require a rental income between 30% and 50% higher than the mortgage payments on your old home. Sometimes the requirement maybe smaller but you will undoubtedly end up paying a higher interest rate.
As in any mortgage the lender will look at income multiples when determining how much they will lend to you on the new home. If the rent from your old home adequately covers the mortgage on the old home to the extent indicated above then the normal income multiple rules apply.
However if this is not the case a lender may deduct the annual mortgage repayments on your old home from your income before applying the normal income multiple rules. For instance if you earn £55,000 a year and your mortgage payments on your old home total £15,000 a year then the income multiple would be applied to £40,000. If the multiple used were 3.5 then you would be able to borrow £140,000.
Lenders are likely to require a 15% to 20% deposit on the new home for larger loans or maybe down to 10% for smaller loans.
Benefits of Let To Buy
This type of mortgage means you do not have to give up ownership of your old home if you are forced to move or want to move for a few years. By doing this you will b able to move back at some point in the future if you want to. You may feel that your old home will hold value better or rise in price quicker than properties in the area you are moving to.
You are able to keep your old property as a long-term investment while speculating on a new home, which you can improve while you live there.
Once you have the mortgage for your new home you will then have two mortgages both at normal residential rates instead of the normal scenario where the second of the mortgages would be at a higher interest rate.
If you want to get into property investment in a bigger way then this could be a great opportunity as the first stage in building up a property portfolio.
You can also use this type of mortgage as a chain breaker mortgage if you are having problems selling your property and need to move home as soon as possible. It can also used to avoid paying for an expensive bridging loan if your house isnt selling and you think it could still be some time before it sells.
Your old home may not be a suitable property for letting to tenants, so check with local letting agents to see what they think. Also you may find that there are so many rental properties in your area that the rental market is very slow and getting a tenant could be very difficult.
You may also find that the mortgage lender on your old home is not happy to allow you let the property and you may need special provisions from them to do so. Similarly if your old home is a leasehold property then you will probably require permission from the freeholder and it might not be forthcoming.
You will have to inform the buildings and contents insurer on you old home and you may have to change insurer if they are not prepared to cover you when you let the property.
If you have been or are currently involved in an IVA you will probably have been told that because of your bad credit from this individual voluntary arrangement, an IVA mortgage is not going to be easy to obtain. Fortunately this is not the whole story. Your IVA may not be such a burden as you think.
Our brokers have access to many specialist bad credit mortgage lenders who have a more objective view to lending and will consider each borrowing situation on its individual merits.
They will take your current circumstances into consideration when making a decision on your ability to make repayments.
Your ability to qualify for a home loan will depend on how long it has been since you completed your IVA and the size of the deposit you have available. A deposit of 5% may be sufficient.
What is an IVA?
An Individual Voluntary Arrangement is a legal agreement between you and your creditors to whom you owe money.
Getting an IVA is a formal insolvency procedure that should be considered when someone has serious problems repaying their debts on unsecured loans and credit.
You will get protection from your creditors, but you will have to agree to arrangements that will eventually allow them to get their money back.
An insolvency practitioner will be appointed to take charge of your financial affairs and to negotiate with your creditors to determine realistically what you can afford to repay each month. During the period of the arrangement you will not be allowed to take on any more loans or credit.
Although, you will probably not lose your home, the equity in it may be released when appropriate to pay off your creditors. If there is equity in your property at the time of the arrangement then this may have to done straight away by obtaining a new mortgage or loan secured against your property to release cash to pay off your debts.
If this is your current situation then give us a call as our brokers specialise in arranging competitive deals for IVA mortgages in the UK.
One of the main benefits of an IVA is that once the arrangment has been finalised your creditors will no longer be able to take action against you to force you to repay them the whole of the debt in full. Furthermore any interest charges on your outstanding debts will be frozen.
Your arrangement will also mean that you can now pay off your debts slower and over time at a rate that you can actually afford. Normally the arrangement will last for a minimum of five years but with a potential option to be extended. At the end of the arrangement any balances remaining on your debts will be written off.
If you want a bad credit IVA mortgage just give us a call.
Before you even think of applying for a remortgage you should do the maths to make sure that you really are going to benefit to the extent that you think. If you are looking to save money then ensure you evaluate the real costs of switching by doing a detailed calculation.
How Do I Work Out How Much I Can Save?
You can calculate your monthly saving by subtracting the new monthly payment from your existing monthly payment. If you make any insurance payments to your lender each month you must exclude them from the above calculation.
This monthly saving will tell you how much extra money you will have in your pocket each month.
However this is not the whole story, as you must take into account the cost of remortgaging, which are fees you must pay for various services provided by different parties to enable the mortgage change to take place.
In order to correctly calculate the real saving from changing your mortgage you need to determine your remortgage costs and subtract them from the accumulated saving provided by your lower monthly payments.
Your accumulated saving is an addition of all your monthly savings from your first payment at the start of your new mortgage to the very last payment right at the end of your new mortgage.
Typically your remortgage costs can include many fees and charges such as some or all of:
Mortgage Redemption Penalty
Property Valuation Fee
Lenders Arrangement Fee
Local Authority Search Fee
Land Registry Fees
Solicitors Legal Fees
Mortgage Indemnity Premium
Mortgage Brokers Fees
Add together the costs of all of those in the list above, which apply to you, to calculate your remortgage costs.
Your accumulated saving is calculated by multiplying your monthly saving by 12 to determine your annual saving each year, and then multiplying this annual saving by the length in years of the new mortgage.
Subtract your remortgage costs from your accumulated savings value to give you the real saving of switching your mortgage.
If the real saving is a negative number then switching is going to cost you more money over the term of the mortgage than you are going to save.
However if your objective is to get cash out of the deal you may be prepared to pay the extra each month as borrowing using a mortgage is cheaper than using other types of loan.
Some lenders may help you by paying some of the fees for you or offer a cash back facility which will help you pay them off yourself. These sort of deals will often appeal to someone with a smaller mortgage where the savings to be made on a lower interest rate will have less of an impact.
If you want to know how soon you your monthly saving will pay you back for your remortgage costs, just divide your remortgage costs by your monthly saving. This will give you a value that represents the number of months it will take. For example if your monthly saving is 50 and your remortgage costs are 500 then it will take 10 months (i.e. 500 / 50 = 10).
If you have any problems working out any of these figures for yourself then give us a call and one of our brokers will work out your switching costs for you.
As soon as you are discharged from bankruptcy you are free to apply for loans and credit, including mortgages, once again. Normally this will occur twelve months after you were made bankrupt.
How can we Help?
Our brokers specialise in arranging mortgages for individuals who have had serious credit problems. If you are a discharged bankrupt they can help you get a mortgage or home loan. They have access to some sympathetic specialist mortgage lenders who are prepared to consider applications from people in your situation.
Obviously this will depend on your current ability to repay but what happened in your past would not work against you in the way that it would if you were to apply to a mainstream lender, many of whom will still consider you bankrupt even after you have been discharged.
Note that the length of time since you were discharged from will determine how good a deal you can get as well as the size of deposit required by the lender. If you are an ex bankrupt and in the market for a mortgage then give us a call now.
What is Bankruptcy?
A Court can declare you bankrupt by issuing a bankruptcy order against you, but only after the court has been presented with a successful bankruptcy petition.
You can file your own bankruptcy petition or a creditor, who is seeking repayment of an unsecured debt, may file one against you. A petition can be presented against you even if you are not in the country.
If you want to reach a settlement with the creditor you should do this before the petition is due to be heard. Do not wait until afterwards, as it could prove very costly and may be hard to achieve.
Bankruptcy will last for a maximum period of 12 months after which you will be discharged.
Bankruptcy is a direct result of a debt problem. A creditor can enforce it on you if you are unable to pay them and they see it as the only way to get some money off you. Alternatively, you may decide that declaring yourself bankrupt will help you resolve your debt problem so you can make a new start without debt.
When you are bankrupt in the UK your assets can be sold and some of your salary used to pay off your creditors. However, your creditors will not be able to pursue you for payment as soon as the bankruptcy order has been made against you. Whats more, when you are discharged the debts you once owed are cancelled and will be no more.
As a bankrupt you will still have to pay for your normal living expenses such as rent etc and make repayments on any loans or credit you arrange after becoming bankrupt. Only very small loans are likely to be available to you and you will have tell any potential creditor that you are bankrupt.
Bankruptcy is a very serious situation and should be considered as a last resort because your assets and valuable possessions will be taken from you and you could be barred from taking certain jobs. There are alternatives available to you and you should really consider them if at all possible.
Always talk to your creditors at the earliest opportunity and try to come to an arrangement that suits you both. Do not just ignore them but try and start a discussion as soon as you know you have problem. In fact as soon as you know that you might get into difficulties you should contact your creditor to see if there is anything that can be done to help you.
In its simplest form this is just the replacement of two or more loans with a single loan. In effect the new single loan pays off your existing loans so that you only have to make a single payment each month to the new loan.
The concept behind this that gives a debt consolidation loan such popularity in the home loans marketplace is that the new loan can be obtained at a lower interest rate than the previous loans it replaces.
As a result the new debt consolidation remortgage or refinance loan will be cheaper to pay off each month than the sum of the repayments required by the previous loans. This will make the new loan more affordable and much easier to manage.
Why Consolidate Debts?
The need for a debt consolidation mortgage is purely driven by a desire to save money both in the short term and potentially over the life of the loan. Whether you can do both of these depends on your personal circumstances and on the types of mortgages you can get.
How Do I Consolidate My Debt?
For anyone currently struggling with his or her finances and making payments to different lenders such a loan could be a great way to get back on track. There are a lot people in the UK currently in the same boat and many have already sorted out their finance problems in this way. It is a proven method to reduce debt to a more manageable level in many circumstances.
However every situation has to be looked at carefully in the context of the circumstances that surround it and it may not always be the case that a consolidation loan is the right answer.
Our brokers have extensive experience in this area and can provide you with independent professional advice to help you determine if it is right for you. Call us now to get expert advice from a broker.
If you are starting to have difficulty making repayments then you really need to look at your situation very seriously and quickly. If you do not then things could get a lot worse and even end up in bankruptcy.
Consolidating your loans will help avoid this and will mean that you will have a more comfortable payment to make each month so your personal finances can start to recover. It will also mean that any harassment you may be getting from the people you owe money to will stop because they will have been paid off.
The interest rates you pay on personal loans, store cards and credit cards are always going to be higher than what you pay on a mortgage because a mortgage is secured against your home, whereas the others are not.
However a mortgage will run for a much longer term than an unsecured loan, so you would have to wait a lot longer before your consolidation loan was paid off. This could therefore actually cost you more, as you will have to make many more repayments. But you might consider this to be the cost you have to bear to keep yourself out of a serious debt situation.
Even if you do not have a good financial record generally we will still be able to help you. So just give one of our advisers a call so we can discuss your situation and offer you the best consolidation deal available. Once you have a solution in place you will have already started to improve your financial record.
What you Need to Know
Before you start you must make sure that you understand what consolidation of your debts really means and how it can help you resolve your particular problem. It would also be wise to find out what the alternatives might be.
Next you will need to know how much you can borrow. This is important, as the amount you borrow from the new lender must be sufficient to pay off all the loans and other credit arrangements that you wish to end.
The amount you have to repay each month must be reduced to a level where you can more easily afford it or even better. If you want to make your life even easier then get a deal where it drops even more. This may be a wise move anyway especially if you find that you will have to pay a variable interest rate, which could easily rise in the future without notice.
You need to determine what might happen if you want to move or pay off the loan or mortgage early. You may find that you will have to make a payment to enable you to do this and it might be quite large. It should not stop you getting the loan unless you can find a similar but better deal, but it is always an advantage to know where you stand.
You will also need to know how much the loan will have cost you by the time it is paid off. This will be good for comparing different loan products you maybe offered to see if one is more expensive than the other.
Finally, find out what the consequences of missing a payment might be. It is better to know now rather than later when you might not be able to do anything about it.
If you have any questions just give one of our advisers a call. Our advice is free and there is no obligation.
What if I have a Serious Debt Problem?
You should get professional advice and some consumer credit counseling from an organisation such as the CCCS (Consumer Credit Counselling Service), which is a UK charity that provides their services for free. Visit the CSSS Website here.
Buy to let mortgages are now very popular as many individuals have decided that investment in residential property is likely to be a better long term proposition than the stock market, savings or pensions.
If you are already into property investment or just starting your property portfolio then our specialist brokers have access to a wide range of appropriate loans with some of the best mortgage rates available.
Phone now and talk to a professional adviser at one of our brokers and get some unbiased and expert advice on the right mortgage for you. Their advice is totally impartial, without obligation and free.
What Is Buy To Let?
Buy to Let is a scheme, which has been designed to help private individuals invest in property for letting purposes without being penalised by mortgage surcharges or paying commercial rates of interest. Basically you can buy property specifically for rent by tenants.
The major difference is that mortgage lenders in the scheme will take account of rental income likely to be achieved from a property when considering an application for that property.
Previously, money from letting could not be considered as income when determining the ability of a borrower to make mortgage repayments. Also in the past anyone buying a property to let would have been charged a higher commercial interest rate. Now, if you apply for a buy to let mortgage or remortgage you will be able to include the potential rent as part of your income.
Buy to Let Return On Investment (ROI)
On average in the UK you can expect to get about a 7% to 10% rental return on your investment, but this can be less for larger more expensive properties.
However, this is before taking into account the day-to-day expenses that every landlord will need to budget for such as property maintenance, insurance, agents fees etc.
The good news is that the value of your property is likely to rise by 10% each year as well and there is currently no sign of this changing in the years to come. This is therefore a great long-term investment as it gives you an income as well as capital appreciation.
Is It Worth It?
If you have to take out a buy to let loan to purchase the property in the first place this will also have to be taken into account when calculating your actual income form the property.
So although the cash left in your pocket from your income may not be large, the gross rental income should cover all the expenses of running the property including the mortgage. In order to do this you will need to have a gross rent from your property that is 25% to 45% greater than your mortgage repayments.
The major benefit will probably be seen when you come to sell, as the price you get could be substantially higher than what you paid for the property when you bought it.
You need to decide what you are looking for. You may want an income or an appreciating asset or maybe even both. All three are attainable, but whether you get what you want will depend entirely on the property you choose, your skill in putting it into the right condition to let and your ability to let it. It wont be easy, but dont let that put you off.
What about Tax?
You can claim some of your expenses as deductions against tax and these include maintenance and repair costs, letting agents fees, insurance, gardening and cleaning.
Anything that can be considered as an improvement to your property is not allowed.
If you let your property furnished the initial purchase cost is not allowed, but you can claim a wear and tear allowance of 10% of the gross rent. The initial cost of furniture, fittings and fixtures is not allowable, but the actual cost of subsequent replacement may be claimed.
Any interest paid as part of your mortgage repayment is also allowed.
Your income after subtracting allowable deductions will be added to the other income on your UK tax return and you will be charged tax accordingly.
When you come to sell your rental property you will have to pay capital gains tax on any gain you have made, but this will vary depending on how long you have owned the property.
If you are looking for a mortgage and have a County Court Judgement or CCJ against you then you might be concerned that a bad credit rating will make it difficult for you to get what you want.
How We Can Help With Bad Credit CCJ Mortgages
There are many reasons why people get CCJs and we understand that it could easily have been through no fault of your own. The good news is that our bokers have access to CCJ mortgages from specialist bad credit lenders who think the same way and who are prepared to look at each application on its merits rather than rely too heavily on historical issues.
Our brokers can arrange a mortgage for you through a specialist bad credit mortgage lender, who often deals with situations just like yours, and who will get the best terms possible for your particular circumstances. Give us a call and a broker will call you back immediately.
Their advice is free and you are under no obligation. They are independent and can therefore give you totally impartial advice on what really is best for you. Get in touch if you want a Bad Credit CCJ Mortgage or home loan.
What is a County Court Judgement?
Unfortunately it is possible for a county court judgement to have been made against you without you even knowing about it.
The claim will be that you owe them money and you have not paid them back.
The judgement passed will order you to pay back what you owe, or some other amount decided by the court, and you will have 30 days to do so. If you pay during this time there will be no impact on your credit record.
If you pay after the 30-day period has elapsed the judgement will be entered in to the Register of Judgements by the Registry Trust and your CCJ will remain there for six years.
This information is a public record, which means anyone can look at it. Unfortunately this also means that it will have a detrimental effect on your credit record because lenders and the companies that help them check your record will have access to it.
Having a CCJ on your record will mean standard lenders will turn you down when you apply for any form of credit including loans and mortgages.
When you pay off the debt you should apply to the court for a Certificate of Satisfaction and although the judgement will stay on the register for the rest of the six years the Registry should automatically inform the credit checking agencies.
It would make sense however to follow this up yourself and make sure your credit record is updated correctly so that the county court judgement does not continue to affect your ability to get credit.
Removing a CCJ from your Credit Report as soon as you can will ensure that your Credit Score and therefore your Credit Rating are both improved much quicker.
What is an Administration Order?
If you have two or more judgements against you can apply to the court to issue an administration order whereby the court will take a payment from you each month and share it between your creditors.
The court will charge you an administration fee to do this but while the order is in place your creditors will not be able to take any type of action against you.
What if I disagree with a Judgement
Unfortunately it is possible for a court judgement to have been made against you without you even knowing about it.
If you apply for credit and find you are rejected due to a CCJ, but you genuinely know nothing about or have a genuine reason to disagree with it, then you can apply to the court and ask them not to apply it straight away. However do not waste the courts time as you may be fined or even sent to prison.
If the court agrees the judgement will be set aside giving you another chance to reply to the claim and more importantly the judgement will be removed from the register.
This means your credit record will no longer have the CCJ on it either.
Some companies who advertise a service to fix credit problems may claim that they can get a judgement taken off the register. Do not use them as they often charge a large fee and may not be able to do what they claim.
If a real mistake has been made and the judgement on the Register is incorrect and should not be there then you can apply to the court for a Certificate of Cancellation, which will completely remove the judgement from the register and should automatically update your credit record. You should of course check your record to make sure that it this has been done.
What is a Default Notice?
A formal default notice is the first stage of the process for any creditor who wishes to take legal action against you for non-payment.
Default notices may get on to your credit record automatically as soon as you fail to make a payment or a lender may give you time to sort out the problem.
Either way once they are on your record they are going to affect your ability to get credit, so resolve the issue with your lender and get them removed as soon as you can.
So if you need a bad credit mortgage due to your poor credit history from a CCJ, Administration Order, Default Notice or any other reason then just call us now!
In general your Credit Report (or File) holds information on your identity and credit history so lenders can check to confirm who you are and look at your past ability to repay loans, credit cards and other forms of credit.
Typically a Credit Reference Agency (CRA) will hold the following types of information in the file they have on you.
 Electoral Roll details updated each year by your local authority. Lenders will use this check the name and addresses on your application form.
 Court Judgements and Scottish decrees.
 Bankruptcies, Individual Voluntary Arrangements and Administration Orders.
 Repossession of your property, if it occurred in the last six years.
Information on your Borrowing Activity:
 Details of all your past and present credit agreements with UK lending companies.
This allows any lender to check if you have repaid previous lenders correctly and see if you are repaying current credit agreements.
The lender will also be able to check how much you already owe to other lenders so they can decide if you can afford more credit.
Whenever you apply for credit your new lender will ask permission to share details about your application and any credit provided with other lenders. These details will then be forwarded to all the Credit Reference Agencies to update your credit file.
Information on Who has accessed your File:
 Every time you apply for credit the lender will access or search your credit file to check your address, identity, credit details etc. The CRAs will keep records of who accessed your file for one year so you can see who has been looking at your information.
Other lenders will be able to see that your Credit File has been accessed but not who did it.
A lender may use the data on the number of accesses to identify abnormal activity, especially if a lot of credit checks are made within a short time period. This may suggest that you are trying to apply for credit, which you cannot really afford, or that someone else is trying to illegally get credit using your identity.
What is Not on your Credit File
You wont find any information about your savings accounts, insurance policies, other investments, race, religion, sexuality, political beliefs, employment history, medical records, Council Tax payments or criminal record.
Also there is no such thing as a Credit Blacklist. Lenders will only check your individual credit file to make a decision.
All information held is purely factual and the CRAs do not give an opinion on the information they hold on you. The CRAs do not make lending decisions as the lender who processes your application does this.
Your credit file does not show whether a lender has refused or accepted your credit application.
A credit check can only be done on an individual and not an address, so previous occupants of your home will have no effect on your credit score. Similarly if you have an impaired credit history it will not affect anyone living at the same address as you.
Just one Credit Score ?
You do not have just a single credit score or rating because each lender calculates your score using their own points system and they do this every time you make an application.
Thus each time you apply your score will be different and every lender will come up with a different score. The lenders may also determine what is a good or bad score using a different points total. They may also score differently for different lending products. Thus you could find yourself being rejected by one lender but accepted by another!
The Credit Reference Agencies can also issue you with a Credit Score, but this is only indicative and will not be calculated the same way as your Lender. It will however give you a good idea of whether or not you are likely to have problems when applying for credit.
Who can access my Credit Report ?
Your permission is required to search your Credit Report. You will give this permission to your lender when you apply for credit. No one else can access your report.
Your UK Credit Rating is the single most important factor in deciding whether or not you get approved for loans, mortgage, credit cards and other forms of credit, and it is based on a Credit Score,
Credit Scoring is a technique used by lending companies to help them predict the risk of lending money to you.
Every lender will have a range of values, say a scale of 0 to 1000, (or maybe 0 to 500), representing the minimum and maximum scores attainable in their scoring system. Note that this scale of a minimum and a maximum could be different for each lender.
If we take the scoring scale of the first example any credit score would have to be between 1 and 1000. On average, using this scoring scale, most people might have a score between 500 and 800.
Again using the same example, if your score were towards the lower value (500) or below then you would have a low or poor credit rating. If your score were nearer the higher value (800) or above then you would have a high or good credit rating.
A credit rating will often be one of 5 grades representing Very Poor, Poor, Fair, Good and Excellent.
Do I have a Single Score or Rating that all Lenders use?
No, a credit score is not a fixed value and your potential lender will calculate a new score every time you make an application for credit such as a mortgage, credit card, hire purchase, bank loan or current account etc.
Lenders calculate a credit score from information on your application form and your credit report.
Unfortunately, a lender will never tell you the exact score they calculated for you because the complex formula each lender uses to perform the calculation is their own commercial secret.
If your application fails because of the credit score they have calculated, a lender may be prepared to give you some sort of indication as to why, but they will always be reticent to go into any detail about your credit score and how it was determined.
Each lender will have a different formula and will therefore calculate your score in a different way.
This means that, even if the details on your credit report are exactly the same when the lenders do their calculations, your credit rating from each lender may be different. This is one reason why some lenders will accept a credit application from you while others will not.
Even if the resulting credit rating is the same. each lender may have a different way of interpreting the results and therefore may make different decisions.
However if your credit is very good or very bad then lenders are more likely to make a decision that has the same effect on your application. It is in the area between where lender differences will have a bigger impact.
The score a lender calculates could also lead to a different decision depending on which Credit Reference Agency provides your Credit Report to them. This is because the information held on you by each agency could very easily be different.
For this reason alone you should personally check your Credit Report at each agency because one report may have detrimental information on it, which could lower your credit score and cause an application to fail if the lender were to use that credit report.
How do I find out what my Credit Rating might be
You can get a credit score and credit rating with a copy of your credit report from the Credit Reference Agencies.
Each agency will use their own independent formula to calculate a score and their score ranges will be different. Thus your score at each agency will be different, but your credit ratings should be similar
The scoring scales used by each agency are currently as follows:
CallCredit 0 to 1500
Experian 0 to 1000
Equifax 0 to 900
The Credit Rating they give you will be a fairly accurate estimate of what a lender might determine for you. Although not exactly the same as a lenders rating it will be sufficiently indicative, so you should be able to tell if it is good or bad or borderline.
Your credit score is so important when applying to make a major financial commitment such as a home loan or mortgage that you should always know what it is before applying.
Having a good credit rating is essential to ensure that a financial company is prepared to lend you money. Your credit score is an estimate of how much of a credit risk you pose to the company and a prediction therefore of the likelihood that you will fail to make your repayments on a loan or credit card in the future.
The better the credit rating then the lower the risk that you will get into financial problems.
Also a better rating will mean that you could be approved for larger loan amounts and at a more favourable rate than someone with a poor score.
Credit Score Examples
Because there are so many different lenders and therefore just as many formulas it is very difficult to determine with any certainty how any actual lending decision will be made for a particular score or credit rating
The table below may give you some idea or best guess of how a credit rating might be interpreted. It uses the same score range example used above (1 to1000).
Because there are so many contributing factors involved such as the size of a loan, the rate and other borrowing terms, only the lender can really determine what kind of a risk they are looking at.
The comments in the table therefore should not be taken as accurate in any way as they are purely for illustrative purposes and can in no way represent the decision of any lender.
1 upto 450
451 to 600
601 to 700
701 to 800
801 to 1000
Note also that the same lender might give a different decision dependent on the type of product you apply for, so that you may be approved for a credit card but not for a mortgage, because the risk to the lender for a very large loan like a mortgage is much higher.