When you’re looking to obtain finance for a new home or investment property, a bad mark on your credit score can be enough to set your plans back. Yet sometimes a bad credit score can be due to an error in the report itself.
So, how does credit scoring work and what can you do to remedy any potential errors?
How does credit scoring work?
Credit scoring is the system used to keep record of how trustworthy people are as borrowers. The higher your score, the more creditworthy you are in the eyes of lenders and the lower your score the less so. Credit reporting agencies collect all sorts of information about you and your financial activities in order to construct your score.
What can you do if there are errors?
Sometimes in the collection and aggregation of data on so many people, mistakes occur.
Thankfully, credit providers are obliged by law to tell you if your loan has been rejected due to something in your credit report. If you’ve been rejected – and you’re sure that there shouldn’t be anything on your report that would reflect poorly on you as a borrower – this can be a sign that an error has occurred.
If you haven’t already, then you should immediately request a copy of your credit report to see if there’s anything on it that shouldn’t be there. You have the right to have mistakes corrected on your report free of charge, so you should do so if necessary.
How can a bad credit mortgage help in these situations?
While your first port of call should be to get the mistake removed, sometimes things mightn’t go your way and you may be stuck with a credit score you don’t agree with.
If this happens, there are still options available for you to get a home loan, like a bad credit mortgage from Red Rock. These are specially designed loans for customers with impaired credit histories. You will likely require a larger deposit with a bad credit loan, and the interest rates will be higher, but they can be a good option for those whose credit score disbar them from obtaining any other finance.
Do you have an impaired credit score, but still after a loan? Get in touch with the team at Red Rock Mortgages today for more information on how our bad credit home loans might be the option for you.