How often to assess your credit score when applying for a bad credit mortgage

Even when applying for a bad credit mortgage, you’ll likely to get a better deal if you take steps to enhance your credit score. In order to review the effect of your improvement efforts, you’ll need to check your credit score on a regular basis, perhaps monthly or even every few weeks, so you stand the best chance of getting a loan application accepted.

However, every time your credit score is accessed, it’s recorded as an enquiry. Too many enquires worry lenders because it looks like you’re applying for multiple loans, and suggests that your financial situation is precarious.

How often can you access your credit report without damaging your score?

What to know about checking your credit score

Enquiries into your credit history are categorised into two types – hard and soft. Hard enquiries are those made by lenders, such as when you apply for a home loan or credit card. Utility providers and mobile phone companies also check your credit history and this may show as a hard enquiry. However, when you access your credit score yourself, or you’re subjected to a background check – such as applying for a job or apartment – these are counted as soft enquiries.

Hard enquiries are the ones you need to limit because they’re visible to other companies checking your score. One hard enquiry in a period of a few months is unlikely to impact your report dramatically, but several in the same time period could bring down your score. If lenders can see lots of enquiries, they’ll assume your financial situation is about to get worse.

If you already have a bad credit report, you don’t want anything to lower it further. It’s a good idea to minimise the number of enquiries showing on your credit report, and work out how to improve your score so that any hard enquiries you to do have don’t bring it down any more than necessary.

Hard enquiries do eventually drop off your credit report which means over time their effect is reduced.

Benefits of accessing your credit score regularly

Borrowers with bad credit are harder to insure, so lenders often compensate by charging higher interest rates or requiring a larger deposit. It’s therefore in your interest to ensure your credit score looks as good as possible before you apply for a bad credit mortgage – and you can only do that by accessing it yourself.

1) Removing errors from your credit report

Get a copy of your credit report and go through it to ensure there is nothing on your credit history showing in error. You may be able to get anything incorrect removed, or at least noted, which makes improving your credit score easier.

2) Informing conversations with lenders

By getting a copy, or several over time, you can also show it to lenders and explain what you’ve done to improve your score. Bad credit mortgages tend to be assessed on a case-by-case basis, which means having details to hand can really inform your discussions. Lenders look at things like the types of defaults, how old they are and what loan-to-value ratio (LTV) the borrower is seeking.

3) Minimising hard enquiries

It can be tempting to make multiple applications and hope someone approves you. However, this could spell disaster for your credit score. Provide your credit report to a loans expert before you make any applications, as they can let you know which lenders are most likely to accept your application, and therefore limit the number of enquiries you rack up.

At Red Rock, we have access to a niche selection of lenders that work with borrowers needing specialist solutions. We know how our lenders work and what they require, helping our bad credit borrowers find the loan they need. Talk to us today about your circumstances.