Getting a mortgage with bad credit is possible, but it can be harder. Irish lenders are very unforgiving about adverse information on your credit file. Firstly, your credit file is a register of any credit you may have from credit cards, loans, and even monthly insurance on your car. If you are considering getting a mortgage, it is very important to maintain a good credit rating.
When you first apply for a mortgage, lenders will carry out a credit check. A credit check comes in the form of a report from the Central Credit Register (CCR) in Ireland. A useful link is https://www.centralcreditregister.ie/about/how-it-works/ .
Can You Get a Mortgage with Bad Credit?
This is a tricky question and depends on the type of credit problem. Currently, the only lender who may offer mortgages to applicants with poor credit history is Finance Ireland. However, they still have rules around lending to people with poor credit. For unsecured loan or credit card arrears, they must be cleared for at least 24 months. For secured arrears, such as a mortgage, they must be cleared for at least 48 months. If you have arrears on loans or mortgages, you will be unable to borrow from any lender in Ireland.
What Can Hurt Your Good Credit Rating
There are several credit institutions who provide information to CCR on personal & business loans, overdrafts, mortgages, credit cards, hire purchase agreements and PCPs. Unpaid utility bills and tax liabilities will not appear of your credit report.
Credit Information Providers, or lenders included on the Central Credit Register:
- Asset finance houses
- Banks
- Credit Unions
- Firms that have acquired loan books from Irish financial institutions in recent years
- Licensed moneylenders
- Local authorities
- NAMA
Note some common Credit Report pitfalls:
- Don’t be fooled by banks or Credit Unions reducing your loan or credit card payments. If you hit a rough time, such as COVID-19 or job loss, any reduced payments agreed with a lender will be reflected as arrears on your credit file.
- Don’t forget about old credit cards that you don’t use, there is a yearly government duty which is charged to the card and if not cleared by you could result in a revoked card which is a big issue for lenders. (However, if we can prove it was just the government duty, then we can get this over the line.)
- For any credit cards you don’t want, make sure they are closed correctly.
How Do You Get Your Report?
The big lesson is to obtain your free credit report, as lenders are more forgiving when forewarned about any credit issues. Credit reports currently take about 4 weeks from the date of order. They are free and you can order them very quickly online at https://www.myrequest.centralcreditregister.ie/
What you need to order a CCR Report:
- Photo with signature (such as passport or driving licence)
- Proof of your address (must be no more than 6 months old)
- Proof of your PPSN
Looking to start the mortgage process, but don’t know where to start? Let us guide you through your mortgage journey and apply online today.