Does a Bad Credit History Impact a Home Loan Application?

By Angela Monroe - July 30, 2018

Buying a home is a really exciting milestone. You may have found the perfect property and are already planning your move. However, it’s important to think about home loans carefully, especially if you have a bad credit history.

Bad credit history is highly likely to affect your mortgage application. Don’t panic though– having a bad credit history does not mean that you will never have a successful mortgage application.

We speak to hundreds of people with bad credit, and we will always do our best to ensure that your mortgage application is approved despite bad credit. Find how can help you with bad credit home loans.

Have you been rejected for home loans?

There’s no denying that bad credit history can lower your chances of getting home loans. It’s easy to get demoralised if you’ve been turned down for home loans in the past.

We have years of experience working with people with bad credit history and have many success stories. We can help you to prepare your mortgage application and help you to apply to the right lenders for your circumstances.

Reasons for your bad credit history

We understand that many people have a bad credit history for reasons that really aren’t their fault. We want to help you to get the best home loan for you, so it’s essential that you provide us with all the information needed to help understand your current financial situation as well as your previous history.

Always provide honest answers when applying for home loans with bad credit. We work with people who have a bad credit history for many reasons including:

  • Bankruptcy
  • Missed payments
  • Defaults on previous loans
  • No credit history

If you’re not sure what’s in your credit history, we can help you get started with a free credit check.

What you can do to improve your credit score

There are a number of things that you can do to help us get your home loan sorted. It starts with looking at how you can improve your credit score, regardless of your previous bad credit history.

Keep Things Stable

Before you apply for a home loan, you want to make sure that things are as stable as possible. If you’ve only just moved jobs or are currently without a permanent residence, you may want to consider waiting a little while before making applying for home loans.

Gather the following documents to give the best proof possible of your current stable situation:

  • Proof of residency—this is essential and if you’re also registered to vote, that’s really helpful.
  • Payslips—this will show that you have a regular income from a stable source
  • Proof of address—even if you’re currently subletting, get your name on the contract
  • Consolidate your debts—you need to make sure that your finances are in the best possible state before you make a mortgage application.
  • Avoid credit applications—it’s really important that you don’t apply for a lot of new credit just before applying for a home loan.

People with a bad credit history will raise alarm bells to potential lenders, but it’s much better if you can show that you are currently managing debts and paying back loans. Ideally, try to have your debts in as few accounts as possible—consolidate things and you’ll streamline the whole process.

Potential lenders can see the credit applications that you have made and if you are making numerous applications, especially within a short period of time, they may become concerned.

There are so many steps you can take to help things along, and we want to help you to make your dreams a reality. Contact us today to discuss how we can help you to find the best home loan for you despite your bad credit history.

Angela Monroe
Angela Monroe is the Community Manager at The Positive Group, specialising in giving people the information that they need when they need it, and putting you on the path to a fair financial future. She has 8 years of experience in helping Australians find the right finance solutions, and regularly contributes articles to empower Australians with the knowledge they need to become financially healthy.

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