Can you get a mortgage with bad credit?
Usually, yes. The obstacle is not that adverse credit makes you unmortgageable — it is that the high street assesses applications against a single automated score, and that score has no way to tell the difference between someone who defaulted during a divorce four years ago and someone who is missing payments today.
Specialist lenders do make that distinction. They underwrite manually and ask four questions: what the issue was, how long ago it was registered, whether it has been settled, and how much deposit you are putting in. A settled default from three years ago with a 20% deposit is a straightforward case for a dozen lenders. The same default, unsatisfied, registered last month, with 5% down, is a much shorter list.
The practical consequence is that which lender you approach matters more than your score does. Applying to a high street bank with adverse credit usually produces a decline and a hard search on your file, which makes the next application harder. That is the failure mode worth avoiding.
How lenders rank different credit issues
Not all adverse credit is weighted the same. Broadly, the closer an issue is to a secured borrowing commitment, the more seriously it is taken.
| Credit issue | How lenders view it | Deposit typically needed |
|---|---|---|
| Late payments on unsecured credit | Mildest form of adverse. Often ignored entirely if over 12 months old and isolated. | 5–10% |
| Defaults | Depends heavily on age and whether satisfied. A settled default over two years old is widely accepted. | 10–15% |
| CCJs (County Court Judgments) | Treated more seriously than defaults. Satisfied CCJs are far easier to place than unsatisfied ones. | 15–25% |
| Mortgage or secured arrears | Weighted most heavily of all — it is direct evidence on the exact obligation being applied for. | 20–25% |
| IVA or Debt Management Plan | Placeable once satisfied. While active, the lender pool is very small. | 20–25% |
| Bankruptcy | Only once discharged. A handful of lenders from one year, most want three years or more. | 25%+ |
Deposit ranges are indicative and shift with how recent the issue is. Every band improves as the adverse ages — the same CCJ that needs 25% today may need 15% once it passes three years.
Recency matters more than severity
Most specialist lenders price adverse credit in time bands rather than by score. The same event moves you through progressively better pricing as it ages:
- Under 12 months — the smallest pool of lenders, the highest rates, the largest deposit requirement.
- 12 to 24 months — noticeably more options, particularly if the debt is now satisfied.
- 24 to 36 months — most specialist lenders are comfortable; rates approach near-prime.
- Over 36 months — many mainstream lenders will consider the case, especially with a satisfied marker.
- Over 6 years — the entry drops off your credit file entirely and stops being disclosable.
This is why the timing question is worth asking explicitly. If your default drops off in four months, waiting may move you a full pricing tier. If it has three years to run, waiting costs you three years of rent for no benefit.
Improving your chances before you apply
- Settle what you can. A satisfied default or CCJ is treated far more favourably than an outstanding one, and satisfying it is usually the single cheapest improvement available.
- Check all three agencies. Experian, Equifax and TransUnion hold different data. Lenders do not all use the same one, and errors are common — a marker that should have dropped off is worth disputing.
- Register to vote. Being on the electoral roll at your current address is a basic identity check that some lenders treat as a hard requirement.
- Build the deposit. Every LTV band you drop widens the lender pool and cuts the rate. This outweighs almost every other action you can take.
- Stop applying for credit. Multiple recent searches read as distress. Leave a clear six months before a mortgage application if you can.
- Keep everything current. Six months of clean payment history immediately before applying does real work, even where older adverse remains.
Plan the exit at the outset
A bad credit mortgage is not meant to be permanent. The sensible structure is a short initial period — often two years — chosen so that it ends around the point your adverse credit ages out of the band that is pricing you.
Two years of clean payments on a mortgage is itself powerful evidence to the next lender. Many borrowers who start on a specialist product remortgage onto a mainstream rate at the first opportunity, and the saving usually dwarfs any early repayment charge they were avoiding.
Watch the early repayment charge when you choose the product. A five-year fix at a specialist rate can lock you out of exactly the improvement you are working towards.
Common questions
Can I get a mortgage with bad credit?
Can I get a mortgage with bad credit?
In most cases yes. Specialist lenders assess the type of adverse credit, how long ago it happened, whether it has been settled, and how much deposit you have — rather than applying a single credit score cut-off the way high street banks do. Recent and unsettled issues are the hardest to place, but very few situations are automatically excluded.
How much deposit do I need with bad credit?
How much deposit do I need with bad credit?
More than a clean applicant. Where a high street lender might accept 5–10%, adverse credit cases typically need 15% and often 25% or more, rising with the severity and recency of the issue. Deposit is the single biggest lever you have: increasing it widens the pool of lenders and lowers the rate more than anything else you can control.
How long does bad credit affect a mortgage application?
How long does bad credit affect a mortgage application?
Most adverse credit stays on your file for six years from the date it was registered, but lenders weight recency heavily. An issue over three years old and settled is treated very differently from one registered last month. Many specialist lenders price in bands — under 12 months, 12 to 24 months, 24 to 36 months, and over 36 months.
What rate will I pay on a bad credit mortgage?
What rate will I pay on a bad credit mortgage?
More than a prime rate, and how much more depends on the severity of the adverse, its recency and your loan to value. The premium narrows sharply as the issue ages and as your deposit grows, which is why remortgaging onto a mainstream product once the adverse falls away is a normal part of the plan rather than an afterthought.
Will applying damage my credit score further?
Will applying damage my credit score further?
An initial enquiry uses a soft search, which is visible only to you and leaves no mark. A hard search happens only at full application, once a lender has indicated they can help. This is why applying through a broker matters with adverse credit — scattering full applications across lenders that were never going to accept you leaves a trail of hard searches that makes the next application harder.
Can I get a mortgage after bankruptcy or an IVA?
Can I get a mortgage after bankruptcy or an IVA?
Yes, once discharged. A small number of lenders consider applications from one year after discharge, though most want three years or more and a substantial deposit. An IVA is treated similarly, with terms improving markedly once it has been satisfied for three years or longer.
Do missed payments on a mobile phone contract count?
Do missed payments on a mobile phone contract count?
They do appear on your file, but lenders weight them far less than missed mortgage or secured loan payments. A single missed communications payment two years ago is a very different proposition to mortgage arrears in the last twelve months, and many specialist lenders ignore minor non-secured blips entirely.
Should I wait until my credit improves before applying?
Should I wait until my credit improves before applying?
Sometimes, and it is worth doing the arithmetic rather than assuming. If a default drops off your file in four months, waiting can move you to a materially better rate. If it has three years left to run, waiting costs you three years of rent or of a worse existing rate. An adviser can tell you which of those you are in.
Related
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An alternative route when remortgaging is not the best option.
Important: Information on this page is for guidance only and does not constitute financial advice. Deposit ranges and lender attitudes are indicative and vary between lenders and over time. Your home may be repossessed if you do not keep up repayments on your mortgage. Subject to status and affordability. CleverCompare is an introducer appointed representative of Charles Frank Finance Limited, which is authorised and regulated by the Financial Conduct Authority.