Getting a mortgage with bad credit may still be possible. The options available to you will depend on the type of credit issue and how long ago it happened. Your deposit and wider finances will also affect what lenders may offer.
This guide explains how lenders assess bad credit, how it may affect your mortgage options and what you can do before applying.
Getting a mortgage with bad credit
ELIGIBILITY
Mortgage options
Some lenders consider applicants with missed payments, defaults, CCJs, IVAs and other past credit issues.
ASSESSMENT
What lenders assess
They consider the type of credit issue, how recent it was and what your finances look like now.
CREDIT HISTORY
Older credit issues
Recent or unresolved problems may carry more weight than older credit issues that have been settled.
DEPOSIT
Larger deposit
A bigger deposit can reduce the lender’s risk and may give you access to more mortgage options.
How much could you borrow?
Use our affordability calculator for a quick estimate.
What does bad credit mean for a mortgage?
Bad credit usually means your credit history contains issues such as missed payments, defaults, CCJs, debt arrangements or other borrowing problems.
It does not automatically prevent you from getting a mortgage. Lenders consider the type of issue, how recent it was, whether it has been resolved and what your finances look like now.
Adverse credit may reduce the number of lenders available, affect how much you can borrow or mean you need a larger deposit. Rates may also be higher depending on the lender and your circumstances.
Check your credit report before applying
Review your credit reports before applying so you know what lenders may see. Check for errors, old information or accounts you do not recognise.
Experian, Equifax and TransUnion may hold different information, so checking all three can give you a fuller picture of your credit history.
If anything is inaccurate, try to correct it before submitting a mortgage application.
How lenders treat different types of credit
Lenders do not treat every credit issue in the same way. They usually look at what happened, how recent it was, the amount involved and whether you have settled the debt.
Missed or late payments
Recent or repeated missed payments may have more impact than isolated issues from several years ago.
Defaults and CCJs
Lenders consider how recent they are, the amounts involved and whether they have been satisfied.
Overdrafts and buy now, pay later
Occasional use may have little impact, but regular overdraft use or several BNPL repayments can increase monthly commitments and affect affordability.
Debt arrangements
Debt Management Plans and IVAs can restrict your options, particularly while they are active or recently completed.
Bankruptcy
Mortgage options may be limited after bankruptcy, and lenders can apply different waiting periods and criteria.
Mortgage arrears
Previous mortgage arrears may receive particular scrutiny because they relate directly to housing payments.
Mortgage costs with bad credit
Adverse credit can sometimes mean higher mortgage rates or a more limited choice of products.
Compare the overall cost rather than the interest rate alone. Product fees, valuation costs, legal fees and early repayment charges can also affect what you pay.
Want to compare current rates?
See the latest mortgage rates and available options.
How to improve your chances before applying
Once you know what is on your credit reports, you can see what needs improving. Making these changes before you apply may help your mortgage application.
01
Check your credit information
Review all three credit reports and correct anything inaccurate or out of date.
02
Manage borrowing carefully
Keep payments up to date and avoid taking on unnecessary new credit before applying.
03
Strengthen your wider position
Reducing debts, saving a larger deposit and keeping your finances stable could improve the options available.
What happens when you apply?
A mortgage application with bad credit follows the usual process, although the lender may ask for more information about your credit history.
A broker can help identify lenders whose criteria may be more suitable before you submit a full application. An Agreement in Principle can also give you an early indication of what you may be able to borrow.
Get ready to make an offer
Receive an early indication of what a lender may be willing to lend.
If you are struggling with debt
If you are finding it difficult to keep up with your mortgage, bills or other debts, getting independent help early can be useful.
MoneyHelper can connect you with free debt advice, and organisations such as National Debtline and StepChange also provide specialist support.
How Muttuo Mortgages can help
Bad credit can make finding a mortgage more complicated. We can help you understand which options may still be available.
Review how your credit history may affect your application
Compare criteria from more than 100 lenders
Understand how your deposit and finances may shape your options
Talk through your options
Explore mortgage options and understand how lenders may assess your credit history and wider circumstances.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Your bad credit mortgage questions answered
Is there a minimum credit score for a mortgage?
No single minimum credit score is used by every mortgage lender. Lenders use their own criteria and also consider your income, deposit, existing debts and the details of any previous credit issues.
Can you remortgage with bad credit?
Potentially. Lenders will consider your credit history alongside your income, existing mortgage, property equity and affordability. Keeping your current mortgage payments up to date may also support your application.
How long does bad credit affect a mortgage application?
There is no single timeframe. The type of issue, how long ago it happened and whether it has been resolved can all affect how lenders assess it.
Can you get a mortgage after an IVA or Debt Management Plan?
Potentially, although your options may be more limited. Lender criteria vary depending on whether the arrangement is active, completed and how long ago it ended.
Can you get a mortgage after bankruptcy?
Potentially, but lender criteria and waiting periods vary. Your current finances and credit history since the bankruptcy will also matter.
