Bad Credit Debt Consolidation

Below the major banks sits a group of lenders built for files that do not fit standard credit policy. They are variously called specialist, non-conforming or near-prime lenders, and they are legitimate, regulated funders rather than a last resort.

The difference is not that they ignore your history. It is that they assess it. Where a bank's automated policy declines on the presence of a default, a specialist assessor asks what it was for, when it happened, whether it was paid, and what has changed since.

• They accept explained credit events rather than screening them out
• They usually lend at lower loan-to-value ratios to offset the risk
• They often accept alternative income evidence for self-employed borrowers
• They price for risk, and the pricing tiers move as your file improves
• Many are designed as a stepping stone, with a refinance to a mainstream lender after a period of clean conduct

A specialist assessor is trying to answer one question: is the event behind you, or is it still happening. Everything they ask for is aimed at that.

• Conduct on secured debt. Mortgage and rent payments made on time carry more weight than anything else on the file.
• The story. What caused the event, evidenced where possible, and what has changed since.
• Whether the event is cured. Paid defaults, satisfied judgments and cleared arrears materially improve a file.
• Loan-to-value ratio. Lower gearing offsets credit risk, and it is the main lever available to a borrower with equity.
• Whether the new loan resolves the position. Consolidating everything reads far better than partial tidying.
• Recent enquiries. A run of applications suggests distress and shopping, which makes the next assessor cautious.
• Income stability, verified properly, including for self-employed borrowers.

Non-conforming lender

A regulated lender that writes loans outside standard bank credit policy, assessing files that an automated policy screens out.

Near-prime

The pricing tier just below mainstream, used for files carrying minor or well-aged credit events.

Cured default

A default that has been paid or settled. It stays on the file, and it reads very differently to an unpaid one of the same size.

Loan-to-value ratio

The loan measured against the value of the security. Specialist lenders lower it to offset credit risk, so a smaller loan is often an easier one.

Credit enquiry

The record left every time you apply. A cluster of them in a short window reads as distress, whatever the reason actually was.

Hardship notice

A request to vary repayments with your existing lender. It is a right, it costs nothing, and it is worth using before arrears deepen.

That third point is worth pressing. Where a default can be paid before application, paying it often opens lenders that would otherwise decline, and it usually costs less than the pricing difference between tiers.

We do not quote rates on this site, and we would not quote one here even if we could, because it would depend entirely on your file, the security, the lender and the day. What we can tell you is how the pricing logic works, so nothing about it is a surprise.

The rational way to use this is to accept the specialist pricing for a defined period, keep the conduct clean, and refinance to a cheaper lender once the file supports it. That is not a consolation. It is the actual path most people take, and it works.

Formal insolvency leaves a longer mark than a default, and lenders treat the period since discharge or completion as the key variable. Mainstream lenders generally want a substantial clear period. Specialist lenders will look sooner, at lower gearing.

After bankruptcy

Once discharged, you can apply for credit. What lenders assess is how long ago the discharge occurred, what your conduct has been since, and whether income is now stable. A clean rental ledger or mortgage record since discharge is worth more than any explanation.

After a part IX debt agreement

A completed debt agreement is recorded on the National Personal Insolvency Index and appears on your credit file for a defined period. Lenders vary widely on how they treat it, and some will consider a file where the agreement is completed rather than merely current.

1. 01

   Get an accurate picture of your file

   Obtain your credit reports from the bureaus. They are free, and people are routinely wrong about what is actually listed. Errors are more common than most borrowers expect.

2. 02

   Correct what is wrong, properly

   If a listing is incorrect, you can dispute it directly with the credit provider or the bureau at no cost, and escalate to AFCA if it is not resolved. You do not need to pay a credit repair firm to do this.

3. 03

   Cure what can be cured

   Pay or settle defaults where you can, satisfy judgments, and bring arrears current. Each one widens the panel and improves pricing.

4. 04

   Consolidate on the terms available now

   One loan, one repayment, everything cleared at settlement. Stability is what the next assessor will be looking for.

5. 05

   Build twelve months of clean conduct

   Every repayment on time, no new enquiries, no dishonours. This is the part that does the real work, and it cannot be shortcut.

6. 06

   Refinance to a cheaper lender

   We diarise the review rather than leaving it to you to remember. A file that qualified for specialist pricing often qualifies for something better a year later.

• We cannot remove correct listings from your credit file. Nobody can, and anyone promising it is selling something you should not buy.
• We are not a credit repair firm and we do not charge for disputing listings, which you can do yourself for free.
• We do not guarantee approval. Specialist lenders decline files too, and we will tell you when yours is likely to be one.
• We do not offer no-credit-check lending, and you should be wary of anyone who does.
• We do not give legal, tax or insolvency advice.

You are not the first, and you will be alright.