However, just because your credit score isn’t perfect, there are other ways to get around this problem. Below we have listed a few tips to help you on your way to owning a home.

Your credit score

A credit score is a number which is generated by a mathematical algorithm using information from your credit report. It has been designed to identify risk and the likelihood that you will become seriously delinquent on your credit obligations.

Firstly, if you are unsure of your credit score, you can use certain websites online which will be able to tell you your current rating as well as how much money you currently owe.

• Excellent Credit: 750+
• Good Credit: 700-749
• Fair Credit: 650-699
• Poor Credit: 550-649
• Bad Credit: 550 and below

Every mortgage company will have a different criteria of what they accept as ‘good’ credit, and the higher your credit score the more likely you are to be accepted. If your credit score sits in one of the lower brackets, this means that you may not be accepted.

Building your credit score up

There are many ways you can build your credit score up, it may just be low as you have never taken out any kind of credit. If this is the case, it is recommended that you get a credit card, as this will prove to borrowers that you are reliable in paying back money which is borrowed, just be sure that you make your payment on time.

If your credit score isn’t so great because you have outstanding debt, it is essential that you pay this off when you can. It may be tough at first, but you through time you will eventually pay it off.

Another way to stop damaging your credit score is to do the following:

• Stop applying for more credit.
• Cancel any credit cards you don’t use.
• If you haven’t already, register on the electoral roll.

Remember, doing the above is no guarantee that your credit score will have improved enough to be approved for a mortgage. It takes time for your credit score to recover if you have been rejected multiple times or missed multiple repayments.

Broker services

If your credit score is in the lower bracket, it would be best to speak with an independent mortgage broker as they can advise you on the best route to take when applying.

A mortgage broker acts as the middle man between you and your lender, and they will try and find you the best possible deal on your mortgage. There will be charges when using a broker service, but it might be an option if you are refused a mortgage through a bank or any high-street lenders.

Eligibility

Some mortgages are specially designed for people whose credit history is far from perfect, and these are known as ‘sub-prime’ or ‘adverse credit’ mortgages.

They work the same way as standard mortgages, but interest rates are usually higher and you are often in need of a more sizable deposit. Most lenders will require a deposit of 25% to 30% of the property’s value.

Something you should remember when trying to build up your credit score is that it may take a while, but will be worth it in the end.

If you would prefer to rent a property instead of buying, we have a great range of houses for rent in North Devon. Sometimes buying won’t be an option, but renting a property is often seen as the easiest way to move out for the younger generation.