We bought £178,000 first-home after being REJECTED for a mortgage due to poor credit score

ALTHOUGH it’s just one little number, your credit score can stop you buying a house – as first-time buyers Bella Fearn and Matthew Martin nearly found out.

The couple suffered a big set-back when their bank said they wouldn’t lend them the money they needed to buy their £178,500 three-bed first home.

Bella and Matthew are now homeowners and live in their three-bed house in Cheadle

Bella and Matthew are now homeowners and live in their three-bed house in Cheadle

Bella loves a bargain and gets her furniture for less off Facebook Marketplace

Bella loves a bargain and gets her furniture for less off Facebook Marketplace

They used the shared ownership scheme to bag their place

They used the shared ownership scheme to bag their place

It’s because Matthew, an Iceland delivery driver, had a poor credit score after running into financial problems previously.

Your credit score is used by lenders to help them decide whether to lend money to you – a low credit score can mean you are deemed too risky by banks.

You’ll also fine you’re locked out of the best deals when it comes to getting a mortgage or any credit – which means you have to pay higher interest rates. 

The couple decided to lean heavily on Bella’s credit score – who also works at Iceland – to buy their home.

It meant she worked hard on boosting hers as much as possible to improve their chances of getting a loan.

She took out a credit card to build her credit history – and it worked, as their second mortgage application approved.

Bella also worked overtime at the supermarket to get hundreds of pounds of extra income per week, which all went towards the £13,387 deposit for the house.

A savings rule she stuck to, where she put aside £200 a week towards her savings, kept her on track.

Shopping at different stores for her groceries helped her keep costs low and more cash in the bank too.

The couple moved into their new home in February this year.

Bella sat down with The Sun to talk through how the couple went from being savers to homeowners for our My First Home series.

Tell me about your house

It’s a three bed semi-detached new-build house in Cheadle, Staffordshire.

One of the bedrooms is a walk-in wardrobe, and the other we use as a spare room for when my niece stays over.

There are three bathrooms too, one of which is an ensuite in the master bedroom.

We have an open plan kitchen and dining room, and a separate lounge.

There’s a decent sized garden to the back, and we have a driveway.

How did you decide on location?

I’m from Cheadle originally, so I know the area really well and wanted to stay around here.

Work is only a five minute drive away, so it’s super convenient for me.

We were sold on how quiet the location was as well – the development our house is part of is built near a field, away from Cheadle town centre.

How much did you pay for it?

We used the Shared Ownership scheme to buy our home.

It means that you co-own your home with a housing association. 

You buy a portion of the property and then pay rent on the part that you don’t own to your housing association.

The house cost £178,500, and we own 50% of it.

We took out a Shared Ownership mortgage of £89,250 at a five year fixed rate of 4.4% for 35 years.

Our deposit was 13% at £13,387 – you pay a deposit on the portion of the house that you are buying.

Our rent stands at £208 a month.

How did you save for it?

Working overtime at Iceland during the pandemic was the main way I saved a lot of money.

Before Covid, I was on a 7.5hours a week contract, but because it was so busy because of the crisis, my hours were boosted to 50 hours a week.

That meant I was getting around £380 extra per week because of the extra hours I worked.

I set a savings target for myself to meet every week – I would aim to put £200 aside.

If I didn’t hit that target, I would aim to squirrel away more the next week.

One of the main reasons why I was able to put aside so much money was because me and Matthew lived with my mum and she didn’t charge us rent.

We were so lucky as this meant we could focus on putting all our money towards saving for a home – but I made sure to clean the house and make dinner in exchange.

I also set spending targets when it came to food shopping. 

I had a budget of spending £40 every two weeks on groceries.

To make sure I kept to that, I would see which supermarket was selling what was on my shopping list the cheapest, so I would go to different stores for different things.

Before we started saving, I loved shopping for clothes – I would spend £80 every two weeks on Pretty Little Thing.

But I cut this down to £12 every two weeks, saving me £136 a month.

Were there any complications?

Our first mortgage application was rejected because my partner had a poor credit score. 

There was some financial issues with a credit card when he was in a previous relationship, and it dragged his credit score down.

We decided to rely heavily on mine to get a mortgage – so I worked to boost it.

I took out a credit card and every time we bought things for the house, I would buy it on the card and then pay it off straight away.

Doing this helped to increase my own score to a point where we got our mortgage application approved the second time around.

How did you afford to furnish it?

We were buying bits of furniture for the house while we were saving up for a deposit to spread the cost.

I never buy anything for full price – I shopped on Facebook Marketplace and saved a lot of money when it came to buying what we needed for the house.

I found two Dunelm drawers that I paid £70 in total for – when I checked online they were listed at £99 each, saving me nearly £130.

Separately, I bought snother chest of drawers for £70 – but I noticed that similar drawers were being sold by other shops for £299.

I like going to car boots for my hauls as well – I found a fluffy rug from Dunelm with the tags still on that was £18 originally, but was being sold for a tenner.

Advice for other first-time buyers?

It’s good to talk to others about how they bought their home to see how they did it.

My mum was my inspiration –  she was a single-parent and she managed to buy a home by herself when bringing me, my brother and sister up.

I knew if she could do it, I could too.

All you need to do is set yourself goals and keep to them.

I set up an Instagram account so I could share my own journey with others.

Make sure to have an emergency fund in place too – that means you won’t get in trouble if there’s an issue you urgently have to pay for.

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