Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
Why bad credit doesn't automatically rule you out
The obstacle is rarely that adverse credit makes you unmortgageable. It is that the high street assesses applications against a single automated score, and that score cannot 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 large deposit is a very different case from the same default, unsatisfied and registered last month, with the minimum down.
The practical consequence is that which lender you approach matters more than your score. Applying to a lender that was never going to accept you usually produces a decline and a hard search on your file, which makes the next application harder.
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.
- Late payments on unsecured credit — the mildest form of adverse; often ignored entirely if over 12 months old and isolated.
- Defaults — depends heavily on age and whether satisfied; a settled default over two years old is widely accepted.
- CCJs (County Court Judgments) — treated more seriously than defaults; satisfied CCJs are far easier to place than unsatisfied ones.
- Mortgage or secured arrears — weighted most heavily of all, because it is direct evidence on the exact type of obligation being applied for.
- IVA or debt management plan — considered once satisfied; while active, the choice of lenders is very small.
- Bankruptcy — only once discharged; a handful of lenders consider applications from one year after, most want three years or more.
Recency matters more than severity
Many specialist lenders price adverse credit in time bands rather than by score. The same event moves you through progressively better terms as it ages:
- Under 12 months — the fewest lenders, the highest rates and 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 and rates move closer to mainstream.
- 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.
Improving your chances before you apply
- Settle what you can. A satisfied default or CCJ is treated far more favourably than an outstanding one.
- Check all three credit reference 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 some lenders treat as a requirement.
- Build the deposit. Every loan to value band you drop widens your choice of lenders and usually lowers the rate.
- Stop applying for credit. Multiple recent searches can read as financial distress; leave a clear gap before a mortgage application if you can.
- Keep everything current. A run of clean payment history immediately before applying does real work, even where older adverse credit remains.
Plan the exit at the outset
A bad credit mortgage is not meant to be permanent. A common approach is a short initial period — often two years — chosen so that it ends around the point your adverse credit ages into a better band.
A record of clean mortgage payments is itself strong evidence for the next lender, and many borrowers who start on a specialist product later remortgage onto a mainstream rate. Watch the early repayment charge when you choose the product: a long fix at a specialist rate can lock you out of exactly the improvement you are working towards.
A regulated mortgage broker or independent financial advice firm can help you find lenders likely to accept your circumstances. MoneyHelper (moneyhelper.org.uk) offers free, impartial guidance on credit reports and mortgages.
Bad credit mortgages guides
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 score cut-off. 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. Adverse credit cases typically need a larger deposit, rising with the severity and recency of the issue. Deposit is the biggest lever you have: increasing it widens the choice 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.
What rate will I pay on a bad credit mortgage?
What rate will I pay on a bad credit mortgage?
More than a mainstream rate, and how much more depends on the severity of the issue, its recency and your loan to value. The premium narrows as the issue ages and as your deposit grows, which is why remortgaging onto a mainstream product later is a normal part of the plan.
Will applying damage my credit score further?
Will applying damage my credit score further?
Each full application usually involves a hard search, which is visible to other lenders. Scattering applications across lenders unlikely to accept you leaves a trail of hard searches that can make the next application harder, so it pays to target lenders whose criteria fit your circumstances.
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 once it has been satisfied for a few years.
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 payment two years ago is a very different proposition to mortgage arrears in the last twelve months.
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 a few months, waiting may get you a better rate. If it has years left to run, waiting costs you that time in rent or on a worse existing rate. A regulated mortgage broker can help you weigh this up.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
Important: This page is general information, not financial advice or a personal recommendation. Product features and eligibility vary by provider — check the provider's own terms before you buy or apply. Lender attitudes to adverse credit are indicative and vary between lenders and over time.