How to Successfully Apply for Equity Release with a Lower Credit Score

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Holo Team

2023-06-18T12:50:47.951Z


If you have a low credit score, getting approved for equity release can be challenging. But it's not impossible. In this article, we'll walk you through the steps you can take to increase your chances of releasing equity from your property with a less-than-perfect credit score.

What is equity release?

Equity release is a type of loan that allows homeowners to borrow money by using their property as collateral. The amount of money you can borrow is based on the equity you have in your home, which is the difference between the value of your property and the outstanding mortgage balance.

Why is Credit Score Important for an equity release?

Credit score plays a critical role in getting approved for an equity release. Lenders use credit scores to assess the risk of lending money to a borrower. If you have a low credit score, lenders may consider you a high-risk borrower, and they may either decline your application or offer you a higher interest rate to compensate for the risk.

Steps to get an equity release with bad credit

  • Know your credit score: Before applying for an equity release, check your credit score. You can get a free credit report from the Al Etihad Credit Bureau. This report will give you an idea of where you stand in terms of creditworthiness.
  • Enhance your credit rating: In case your credit score is below average, work towards improving it. Pay your bills on time, reduce your debt-to-income ratio, and correct any errors on your credit report.
  • Shop around for lenders: Not all lenders have the same criteria for approving equity releases. Shop around for lenders that offer equity releases to borrowers with bad credit.
  • Apply through Holo: Another option is to use a digital mortgage platform like Holo. Holo connects you with a network of lenders that offer equity releases to borrowers with bad credit. By using Holo, you can compare multiple loan offers and choose the one that best fits your needs.

Conclusion

Getting an equity release with bad credit is possible, but it requires effort and careful planning. By following the steps outlined in this article, you can increase your chances of getting approved for an equity release in the UAE. Remember to do your research, shop around for lenders, and use a digital mortgage platform like Holo to compare loan offers and find the best deal.