Not all credit problems are treated equally. A single late payment from three years ago is very different from a recent bankruptcy. Paid defaults over 12 months old are tolerated by some mainstream lenders if you can explain the circumstances. Multiple unpaid defaults or judgments will typically require a specialist (non-conforming) lender with higher rates.
Lenders also look at the story behind the credit issue. Medical emergencies, relationship breakdowns, or temporary job loss with a clear recovery are viewed more sympathetically than ongoing financial mismanagement. Lendology helps you prepare a clear credit explanation letter that addresses the lender's concerns.
A larger deposit significantly improves your chances. With 20% or more, specialist lenders may offer reasonable rates even with credit issues. Clear any outstanding defaults if possible - a paid default looks better than an unpaid one. Maintain clean credit for 6-12 months before applying, and avoid multiple credit enquiries.
Lendology compares 60+ lenders including specialist non-conforming lenders who specifically work with borrowers recovering from credit issues. We assess your full situation before recommending the best path forward - sometimes that means applying now with a specialist lender, and sometimes it means waiting 6 months to qualify with a mainstream lender at a better rate.
Jason and Steve are Adelaide mortgage brokers who give honest advice at no cost to you. No obligation.
The information on this page is general in nature and does not constitute financial advice. Given Finance Pty Ltd (t/a Lendology) ACN 624 144 501 is authorised under LMG Broker Services Pty Ltd ACL 517192.