Poor credit history and mortgage applications are not a match made in heaven.
You do not want to bury your head in the sand.
Nor do you want to knowingly apply for a mortgage if you have an impaired credit history. You will only waste your time, and your Mortgage Advisor’s time.
What appears on your Credit Report?
The following are examples of credit facilities that will appear on your credit report:
- Personal loan
- Credit Union loan
- Hire Purchase agreement Car PCP
- Flexi-Finance
- Mortgage
- Credit Card
- Overdraft
If you have ever held one of the above before, and think you have had an issue on it, you should run a credit report for yourself before applying for a mortgage.
Credit Reporting Sites
There are two credit reporting sites in Ireland at present:
Irish Credit Bureau (ICB) Central Credit Register (CCR)
The CCR is newer and much more comprehensive in its detail than the older ICB system.
If you miss a repayment, but make it up within the same calendar month, it won’t go down as a missed payment on your credit report. It is not good if you have unpaid direct debits showing in your statements in the 6 months prior to a mortgage application.
What to do
When you take out a loan it is your responsibility to make sure the repayments are made on time, and that the loan is paid off within the original term. If an issue with this arises, make sure to correct it.
Credit reports that show an arrears position or missed payments, will need to be brought up to date. You can expect to have to wait for a period of 2 years from correcting the issue before you can look at applying for a mortgage.
If in doubt, run your CCR and reach out to a Mortgage Broker to establish the impact this may have on your ability to borrow.
Mortgage brokers are well placed to give you a feel for what your position in this area is like. If you’d like to talk to us about your credit history and mortgage application, get in touch
For the full set of tips on making yourself mortgage ready, download our Top Tips for First Time Buyers guide – 17 pages of knowledge from years of helping people get the mortgage they want.