What is classified as 'bad credit'?
Any history of poor credit usage can be regarded as bad credit, including previous mortgage arrears, non-payment (or late payment) of bills or credit cards, county court judgements (CCJs) and even bankruptcy.
Even though you may not have realised it at the time, there's a chance you may have a bad credit rating, which means a lender will need to take a fresh look at your credit status before proceeding with your mortgage application.
Will my mortgage be any different as a result?
The mortgage you are likely to be offered if you have a history of bad debt is sometimes known as a sub-prime or non-standard mortgage. It is no different to a standard mortgage, except that it may be offered at a slightly higher rate.
Once you have been successful in obtaining your mortgage, your credit history immediately improves. As long as you keep up the repayments for a period of time, you will eventually be entitled to re-mortgage to a fully standard mortgage and therefore enjoy a wider range of options.
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