Why Does My Adverse Credit History Stop Me From Getting A Mortgage?

Building societies, banks and other mortgage companies are in the money lending business to make money. Every time a house owner is unable to pay their mortgage payments, this is called a bad debt. Every bad debt that a company has causes them a lot of trouble and costs them money.

Firstly they will spend time and money trying to get the money from you. This will involve sending letters out, then it might involve paying debt collectors. They may wait for a few months to see if you can come up with the money, which means that they are losing money on your payments.

Eventually, if all else fails, they will then repossess your house, that is, take it away from you and sell it to get their money back. Although this will nearly always work for them, it is a costly process and they would rather get money from you regularly every month.

If you have an adverse credit history, you are seen as being more likely to default on your payments and for that reason, the companies are less likely to want to offer you a mortgage.