Mortgage with bad credit

If you have bad credit and want a mortgage, don’t panic. Some lenders accept various credit issues, so you just need to apply with a suitable lender to get a mortgage.

Having a bad credit rating is very common. In the UK, one in five people has a low credit score. Each of us has a unique credit history, so lenders are more than used to seeing their fair share of the good, the bad and the ugly.

This guide will give you the confidence and understanding of how to get a mortgage despite having bad credit.

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Can I get a mortgage with bad credit?

You can get a mortgage with bad credit if you apply with a suitable lender. Lenders each have different criteria, so while some may accept credit issues, the majority don’t.

For instance, the big high-street lenders tend not to accept adverse credit, but some lenders will. There are also specialist lenders for applicants with severe credit problems, such as bankruptcies.

Although some lenders may approve you, they may charge higher than average rates to compensate for the risk involved. You may also need a higher deposit, such as 15%-20%, depending on the issues on your credit file.

What credit issues can affect my mortgage?

One of the most significant factors that can affect your mortgage is the type of credit issues you’ve had. Certain credit issues will affect your mortgage chances more than others.

Late payments

Missed or late payments aren’t deemed severe and will have little effect on your mortgage. Lenders will usually assess how many late payments you’ve had within the last two years and whether you’ve previously missed any mortgage payments.

Having missed mortgage payments within the last two years will slightly limit your options, but there are still lenders that will consider you. If you missed the odd phone bill a while ago, it should have little impact on your mortgage.

Learn more: Getting a mortgage after late payments

County court judgments (CCJs)

A county court judgment will stay on your credit file for six years. If your CCJ happened over six years ago, it won’t affect your mortgage.

If your CCJ was recent, lenders will check the value and whether it’s been satisfied. Satisfying your CCJ before applying for a mortgage will give you more options, but it is only sometimes necessary. Some lenders will accept applicants with unsatisfied CCJs.

Find out more: How to get a mortgage with a CCJ

Defaults on your credit file

If you have a recently registered default on your credit file, your lender will investigate further. Any defaults over three years old will have little impact, and you should have a choice of lenders to apply with.

Having several defaults in comparison to one can leave fewer options. If you’ve defaulted on credit within the last 12 months, you can still get a mortgage, but you’ll need a mortgage advisor.

Read more: Getting a mortgage with defaults

Debt management plan (DMP)

If you’re on an ongoing debt management plan, there will be fewer lenders, but a mortgage is still possible. Most lenders require applicants to apply once a DMP is complete.

It’s also important to keep up with payments during your DMP. This is to ensure your credit file isn’t damaged any further.

Learn more: How to get a mortgage with a DMP

Individual voluntary arrangement (IVA)

If you’re in an active IVA, only a few lenders will consider you for a mortgage. Some lenders require a discharge period of 1-2 years after your IVA before accepting applicants.

Missing payments or falling behind during your IVA will damage your credit file quite severely. It’s crucial to keep your credit file intact after your IVA, as further credit issues will make it very hard to get a mortgage.

Find out more: Getting a mortgage after an IVA


Bankruptcy is a severe form of adverse credit. Even so, there are lenders that do consider applicants that have been discharged for 1-2 years. You won’t be able to apply for a mortgage while your bankruptcy is ongoing.

Bankruptcy will impact your mortgage more if you’ve only been discharged for less than a year. It will have less of an effect on your mortgage if your bankruptcy happened over three years ago.

Learn more: How to get a mortgage after bankruptcy

Other credit issues

There can be many credit issues affecting your chances of getting a mortgage. Furthermore, you may have more than one credit issue on your file.

Other credit issues that can affect your chances of getting a mortgage include:

You can speak to an advisor if you’re unsure whether you’ll qualify. Our advisors have helped many applicants with credit issues to get a mortgage.

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How to get a mortgage with bad credit

The following steps will improve your chances of getting a mortgage if you have poor credit:

  • Organise your finances – Reduce your spending at least three months before your mortgage application. Pay your bills on time and minimise as much debt as possible. Showing lenders that you’re financially responsible can help you to get a mortgage.
  • Download your credit file – If you’ve had credit issues, you must download your credit file. Doing so lets you see what’s recorded on your file and whether it’s accurate. Your lender will also check your credit history when you apply for a mortgage.
  • Repair your credit score – Repaying your bills on time will help, but you can improve your credit score by repaying your credit card each month in full.
  • Save a bigger deposit – Saving for a 15%-20% deposit will make it easier to get a mortgage with bad credit. A mortgage can be difficult with deposits of 10%. The more you can save for a deposit, the better. 
  • Speak to a mortgage advisor – Speaking to an advisor is one of the best things you can do to get a mortgage with poor credit. An advisor can assess your credit file before finding a suitable lender. Without an advisor, you’d have to find a lender by yourself.
  • Consider getting help – If you’re struggling to save a deposit, consider getting help from a family member. You can use a guarantor or a gifted deposit to strengthen your application. Applying with a partner can also help your application, especially if your partner has a good credit score.
  • Find a lender – Once you’ve found a lender that accepts adverse credit, you’re well on your way to a mortgage. You’ll have to meet the rest of their criteria, such as having an income to repay the mortgage. An advisor can help you with this.

Should I apply for a mortgage with bad credit?

Waiting until your credit issues have passed for at least a year before applying for a mortgage can be beneficial. You may need a mortgage now and can’t afford to wait, so you’ll need to weigh up the advantages and disadvantages before making a decision.

  • Get a mortgage sooner – The best advantage of applying now is that you won’t have to wait to get a mortgage.
  • You might not need to wait – Depending on your credit rating, you could be eligible for a mortgage without paying a larger deposit and higher rates. So, you could find yourself waiting for no reason when you can get a good mortgage deal now.
  • Opportunity to improve your credit – Repaying a mortgage on time each month will do wonders for your credit history. Although you have poor credit, getting a mortgage and repaying it can improve your credit score.

  • You’ll need a larger deposit – Most lenders require a 15%-20% deposit if you have adverse credit. You can get a mortgage with a 5%-10% deposit without having credit issues, so it might be worth waiting. 
  • Rates and fees tend to be higher – Mortgages with bad credit tend to have higher interest rates. Waiting until your credit has improved will unlock better deals. The fees charged by your lender and mortgage advisor will be higher than usual due to your credit rating.
  • Fewer lenders – A good credit rating unlocks almost every lender. On the other hand, only some lenders accept poor credit, so you’ll have fewer deals to choose from if you apply now.

Which mortgage lenders accept bad credit?

  • Bluestone – Bluestone is a specialist mortgage lender that offers mortgages for all types of credit issues. They will consider applicants without defaults or CCJs in the last six months. If the total value of your credit issues is below £300, they’ll consider you, even if they happened within the previous six months.
  • Vida – Vida is a specialist lender that accepts applicants with bad credit. If you’ve been bankrupt or had an IVA, they’ll consider you for a mortgage if your discharge date was over three years ago.
  • Norton – Accepts adverse credit as part of its criteria and considers applicants with active or historic debt management plans. CCJs and defaults won’t count if they’re satisfied and less than £3000.
  • Kensington – Accepts most credit issues, apart from bankruptcies and IVAs. However, they will consider CCJs, defaults, DMPs and late payments.
  • Precise – Only accepts IVAs and bankruptcies discharged over six years ago. They’ll also accept CCJs, defaults and late payments if they’re over three months old and paid.
  • LendInvest – LendInvest is an online lender that accepts CCJs and defaults registered in the last three years. However, the lender won’t take IVAs, bankruptcies, or debt management plans.

Important: Speak to an advisor before approaching a lender. Although lenders accept bad credit, there are other criteria you’ll need to meet, such as income, affordability and your deposit amount. Many other lenders will consider credit issues.

Bad credit mortgage FAQs