I’m a first-time buyer – how I got my £170k two-bed flat despite a terrible credit score due to an unpaid bill


KELLY Richardson almost gave up her dream of being a homeowner after being told that getting a mortgage would be virtually impossible.

The mum-of-two, 38, had missed a water bill of £706 after moving home, which had caused her credit score to plummet.

Kelly overcame her bad credit score to move into her home in October

The two-bedroom flat is on Hayling Island, Hampshire

Kelly worked extra hours to afford her first home

The medical assistant didn’t realise she still had an outstanding payment when she moved out of one rented property to another – and it nearly scuppered her chances of getting a mortgage.

The missing bill kept being sent to her old address, meaning she didn’t get any of the final demand letters.

It also resulted in Kelly getting a County Court Judgement (CCJ).

When a company or individual is owed money and is unable to get the debt repaid they can ask the courts to take legal action.

If they send the CCJ to the wrong address, it would have been your responsibility to update companies with your new details when you moved home, so it’s still valid.

A CCJ negatively impacts your credit score, which typically reduces your chances of borrowing money.

If you pay a CCJ off in full within a month it will be removed from your record completely.

If you repay it after the first month, the CCJ will stay on your record but it will be shown that you’ve settled it.

It’s possible to agree to pay off part of the debt or to pay in instalments.

However, unless you repay all of it, the CCJ stays on your record for six years.

Kelly managed to track down the debt collectors dealing with the missing payment and is now paying it off in monthly instalments.

However, it meant lenders were wary of lending the family money to buy their home.

Specialist mortgage lender Together eventually helped them get a deal.

Kelly borrowed £126,000 with a fixed rate of 6.69% for five years.

Pricing is usually higher than on a standard mortgage to reflect the added risk a lender is taking by giving a loan to a borrower with a poor financial track record.

Kelly and her 12-year-old Kaydon, and Jackapoo puppy Frankie, eventually moved into their £170,000 two-bedroom flat in Hampshire in October.

We sat down with Kelly to chat through how she overcame these challenges to become a homeowner for HOAR’s My First Home series.

Tell me about your home

It’s a two-bedroom flat on Hayling Island in Hampshire.

I have a separate kitchen and living room, with space for a desk where I can work from home.

There are two decent-sized bedrooms and one bathroom.

My flat is right on the seafront and I have a balcony so I can enjoy lovely views of the sea.

How did you decide on location?

I grew up in London but I have lived on Hayling Island since 2014 and I didn’t want to move back to the city.

My son Kaydon goes to school here so it was important to me that we stayed in the area.

My parents also live just across the road and I didn’t want to be far away from them.

How much was it?

My flat cost £170,000 and I put down a 25% deposit of £44,000.

I took out a mortgage of £126,000 for 31 years with a fixed rate of 6.69% for five years.

I got my mortgage with Together, a specialist mortgage and secured loan provider.

My repayments are £813 a month – which is around £200 cheaper than the rent I was paying before I moved into the property.

How did you save for it?

In December last year, I decided that I was fed up with renting and I wanted a place of my own for Kaydon and me.

My daughter Megan, 18, had also moved out of the home.

I decided that the best way to save was to take on extra work.

In the summer, I took up extra work offering medical support at events such as festivals, sports events and competitions.

I would take on at least two events a week alongside my normal nine-to-five job.

Although this was exhausting, I was able to bring in around £1,200 extra a month, which would go straight into my savings.

I also decided to try and find free activities for Kaydon and me to do to try and save money.

Instead of spending around £30 on a cinema trip, for example, we would instead go paddle boarding or kayaking at the beach for free.

This saved me around £100 a month.

I have always been a bit of an impulse purchaser, and I knew I needed to get this under control to save for the deposit.

To resist the temptation to sit and scroll on shopping apps in the evening, especially if Kaydon wasn’t home, I tried to find different ways to entertain myself.

Instead, I would take the dog for a walk or put on a film and make sure my phone wasn’t within my reach.

This stopped me from ordering unnecessary things like Lego for Kaydon, or a new handbag for myself.

I also organised the home screen on my iPhone and put all of my shopping apps into a folder.

I then made sure the folder didn’t appear on my main home screen and stopped me from clicking on them out of habit.

I saved around £200 by cutting out unnecessary spending.

My dad also gave me a cash gift of £9,000 towards my deposit.

I was very lucky to get this help and I know not everyone is as lucky.

How did you overcome your bad credit history?

Unfortunately, I was told by my mortgage advisor in February that I had a CCJ on my record because of an unpaid water bill.

I found out I owed £706 including a debt collection fee.

This was such a shock when I found out because I had never been contacted about it.

I’d moved into a new rented property and contacted all of my suppliers to tell them about my change of address, and to send final bills to my new address.

I paid off my gas and electricity, but in the chaos of moving, I didn’t realise I hadn’t heard from the water company.

I didn’t realise there was a missing final payment to be made and letters and demands were all sent to my old address.

It was really devastating to find out as it completely wiped my credit rating.

I was later told that this would severely impact my ability to get a mortgage.

I contacted the water company which passed me on to the debt collectors who were dealing with the outstanding payment.

I am now paying the debt off in monthly instalments of around £77.

My mortgage advisor helped me to find a lender who would offer me a mortgage despite the CCJ.

It helped that I didn’t have any other outstanding debt either.

How did you afford to furnish it?

I have been buying things in stages to spread out the cost.

I was lucky enough that most of the furniture from my rental place was in good enough condition that I could just bring it to my new home.

This meant I didn’t have to fork out hundreds kitting out my new flat.

What advice would you give to other first-time buyers?

As scary as it seems, just go for it. I genuinely think that if I can do it, then anybody can.

Get a good mortgage advisor – they help so much and will talk you through every step.

They will explain anything you don’t understand and it makes the process a lot easier than doing it all alone.

Meanwhile, we reveal how one family used the snowball method to clear £26,000 worth of debt and buy their first home.

One savvy saver managed to put half of his wages away while still renting to buy his first home.