There is a litany of reasons why your finances may have spiralled out of control. It may be a major issue like redundancy, chronic illness, acute illness, or divorce. It could also have been a one-off where you were overwhelmed by life and missed a payment that left a mark against your name. Whatever the cause, the result is always the same – you get lumped into the bad credit category. Even if you dig your way out of the hole and fix default payments or pay overdue bills, that black mark still stands against your name. So, while you view your credit clear because you have dealt with dealt, lenders might not look at it so kindly.
If that’s the situation you find yourself in now, then you might be feeling overwhelmed. Let us help you tackle the bad credit blues and help you figure out where you are now and where you stand for loans in the future.
What Is Bad Credit?
You may have told someone you have bad credit without understanding what that means. Essentially, bad credit is when you have a history of missing payments. The result of bad credit is that you will not find it easy to get approved for new credit or loans. Lenders tend to avoid people with poor credit histories because they are high-risk. Ultimately, lenders will be concerned about your ability to make repayments on the loan they furnish you with. If you have shown you regularly miss loan repayments or otherwise, then you aren’t necessarily someone who ticks the boxes they want to tick before they offer loans.
How Does Someone Get A Bad Credit Record?
There are several factors that contribute to bad credit.
- Unpaid loan payments or bills
- Exceeding your limit (credit cards or bank account)
- A divorce/separation/breakup that has left you in debt
- A debt agreement (part 9 or 10)
- Taking unpaid time off work, whether due to illness or otherwise
- Credit defaults registered against your name
- Too many potential lenders running credit checks against your name
Do I have a Bad Credit Record?
The reality of the situation is that you probably don’t know if your credit record is bad unless you a) know you have a history of missed payments or b) have recently applied for credit or a loan. That’s generally when people receive the news that lenders have labelled them as non-conforming. You don’t meet the lending rules and it doesn’t matter whether you had major credit issues or accidental ones, you’re high-risk and that is that.
There is good news for you. There are non-bank lenders who may be able to help. Non-bank lenders offer a human touch to the work they do and recognise that sometimes there are circumstances beyond our control that result in credit issues. When you deal with a non-bank lender, you will speak to someone one-on-one as they learn more about your situation to find a solution that works for you.
If you have been rejected for a home loan due to bad credit, then it’s not over! You don’t have to wait to reapply either. There are options.
There are plenty of non-bank lenders like Seek Mortgages who can help. Likely, you will find a specialist loan that is suitable for your circumstances.
If you want more information about securing a home loan, then contact us to learn more about your options.