How Adverse Credit Affects Your Buy-to-Let Options
If you’ve had credit issues in the past — maybe a missed payment, default, CCJ, or even bankruptcy — you might assume getting a buy-to-let mortgage is off the table. But here’s the good news: having adverse credit doesn’t mean you can’t become a landlord.
At Mortgage Bridge, we work with people every week who think their credit history will hold them back, only to discover that there are specialist lenders ready to help. It’s all about understanding how adverse credit affects your options and how to present your application in the best possible light.
Let’s walk through what lenders look for, what kind of buy-to-let deals are available with poor credit, and how to maximise your chances of approval.
What Counts as “Adverse Credit” When Applying for a Buy-to-Let Mortgage?
“Adverse credit” simply means there are some negative marks on your credit file that show past financial difficulty. These can range from minor to serious, including:
- Missed or late payments
- Defaults on loans, credit cards, or utilities
- County Court Judgments (CCJs)
- Debt Management Plans (DMPs)
- Individual Voluntary Arrangements (IVAs)
- Bankruptcy or repossession
Lenders assess how recent and severe these issues are. A single missed payment two years ago won’t carry the same weight as a recent default or bankruptcy. The key is demonstrating that your situation has improved and that you now manage your finances responsibly.
Can You Get a Buy-to-Let Mortgage with Bad Credit?
Yes — it’s absolutely possible.
In fact, the buy-to-let market is one of the most flexible when it comes to adverse credit. That’s because affordability is based mainly on rental income, not just personal earnings or credit history.
While mainstream banks might decline your application, specialist lenders often take a more practical view. They’ll focus on:
- The cause of your credit issues
- How long ago they happened
- Your current financial position
- The rental yield of the property
If you can show stability — such as consistent income, a good deposit, and a solid property choice — you’ll often find lenders willing to say yes where others won’t.
How Do Lenders Assess Credit Issues for Buy-to-Let Mortgages?
When reviewing your application, lenders typically break things down into three key areas:
1. The Type of Credit Issue
Minor blips like late payments or older defaults are less concerning than major events like bankruptcy or repossession.
2. The Timing
The older the credit event, the better. Many lenders ignore issues over six years old, as they drop off your credit file entirely.
3. The Pattern
If your issues were one-off events — for example, caused by redundancy or illness — lenders tend to be more understanding than if there’s a pattern of repeated missed payments.
We’ve worked with clients who had CCJs only two years ago and still secured competitive buy-to-let mortgages. The key is choosing the right lender who understands your circumstances.
Do Different Credit Problems Affect Your Buy-to-Let Options Differently?
Yes, each type of adverse credit has its own impact. Here’s how lenders usually view them:
Missed or Late Payments
If they’re minor and historic, most lenders overlook them — especially if you’ve stayed on track since.
Defaults
Defaults under two years old can limit your options, but there are still lenders who’ll consider you, especially if your deposit is strong.
CCJs
If the CCJs have been satisfied and are over a year old, many specialist lenders are fine with them.
Debt Management Plans (DMPs)
If your DMP is complete or you’ve been making consistent payments, you can still get approved — even while the plan is active.
Bankruptcy or IVA
Once discharged (typically after 12 months), you’ll need to wait a few years before most lenders will consider you. After six years, bankruptcy usually falls off your record entirely.
Whatever your credit situation, we’ll help you find the lenders who can work with your history — not against it.
How Much Deposit Do I Need for a Buy-to-Let Mortgage with Bad Credit?
The bigger the deposit, the stronger your case.
Most lenders ask for at least 25%, but if you’ve got more serious credit issues, you might need 30–40%.
Here’s why: a larger deposit reduces the lender’s risk. It also shows financial stability and commitment, which helps offset your credit history.
If your credit issues are minor or several years old, you might still qualify for standard 75% loan-to-value (LTV) deals.
We’ll help you work out how much you need to put down and which lenders match your deposit level.
How Does Rental Income Affect Buy-to-Let Approval with Adverse Credit?
With buy-to-let mortgages, rental income does most of the heavy lifting in proving affordability.
Lenders use a “rental coverage ratio” — usually 125% to 145% of the mortgage payment — to ensure the rent comfortably covers costs.
That means even if your credit isn’t perfect, a property with strong rental yield can make your case much more attractive.
We’ll calculate your likely borrowing power based on rental income and identify lenders who apply more flexible stress tests for applicants with adverse credit.
Can I Use My Personal Income to Help My Application?
Yes, and this can be a game-changer.
Some lenders allow what’s known as “top-slicing”, where your personal income is used to make up any shortfall in rental affordability.
This is especially useful if you’re a higher earner or if the rental income is close but not quite high enough to pass affordability checks.
By combining rental and personal income, we can often open up more lending options and potentially secure a better rate.
Are Interest Rates Higher for Buy-to-Let Mortgages with Bad Credit?
Usually, yes — but not always by much.
Specialist lenders often charge slightly higher rates to offset the perceived risk of adverse credit, but competition in this space has brought those premiums down significantly.
The good news is that as your credit improves, you can often remortgage later onto a better rate once you’ve built up a track record of reliable payments.
We’ll help you find the most competitive lender for your situation now — and create a plan for improving your rate in the future.
Can You Get a Buy-to-Let Mortgage After Bankruptcy or Repossession?
Yes, though timing is everything.
If you’ve been discharged from bankruptcy or had a repossession, most lenders want to see a clean financial record since the event.
Here’s a rough guide:
- 1–2 years after discharge: A few specialist lenders may consider you with a larger deposit.
- 3–6 years after discharge: Your options expand as more lenders become open to your case.
- 6+ years: The event will drop off your file entirely, giving you a fresh start.
If you’re rebuilding after bankruptcy, we’ll guide you toward lenders who specialise in “fresh start” buy-to-let mortgages.
What If My Bank Has Already Declined My Application?
Don’t panic — it’s very common.
High street banks often have strict credit criteria, but there are plenty of alternative lenders who take a more flexible, case-by-case approach.
We regularly help clients who’ve been declined by major banks find approval elsewhere within weeks. The difference lies in knowing which lenders genuinely understand the buy-to-let market and how to present your case clearly.
What Documents Will I Need to Apply?
Even with adverse credit, the documentation is similar to a standard buy-to-let application. You’ll usually need:
- Proof of ID and address
- Evidence of deposit funds
- Bank statements (3–6 months)
- Proof of income (payslips, tax returns, or company accounts)
- Details of any existing credit issues (such as settlement letters or DMP statements)
We’ll handle all the prep work and make sure your application highlights your financial recovery and current stability.
How Can I Improve My Chances of Approval?
If your credit history isn’t spotless, here are a few practical steps you can take:
- Check your credit report – Make sure all information is accurate and up to date.
- Pay off small debts – Reducing balances helps show financial control.
- Keep up with current payments – Consistency is key.
- Avoid new credit applications before applying for a mortgage.
- Save a bigger deposit – It instantly boosts lender confidence.
- Work with a specialist broker – That’s us! We know exactly which lenders are likely to say yes.
Taking even a few of these steps can make a big difference to your approval odds.
Can I Get a Buy-to-Let Mortgage If I’m Self-Employed and Have Adverse Credit?
Yes — and we help people in this exact situation all the time.
Lenders will typically ask for 2–3 years of accounts or tax returns to assess your income. Some specialist lenders can work with just one year of figures if everything else looks strong.
If your income is complex — for example, dividends, retained profits, or multiple income sources — we’ll present it clearly so the lender sees your full earning potential, not just the basics.
Are Limited Company Buy-to-Let Mortgages Easier with Bad Credit?
In some cases, yes.
When you buy through a limited company (SPV), lenders often use slightly different criteria. Because the property is treated as a business investment, some lenders are more flexible with credit history — especially if your personal finances have improved and the rental yield is strong.
Limited company buy-to-lets can also offer better tax efficiency, so they’re worth considering if you’re looking to grow your portfolio despite past credit issues.
Final Thoughts: Adverse Credit Doesn’t Mean “No”
Having adverse credit doesn’t have to stop you from becoming a landlord — it just means finding the right route.
At Mortgage Bridge, we specialise in helping landlords with bad credit, complex income, or previous financial difficulties find the right buy-to-let mortgage. We know which lenders look beyond credit scores and focus on your real potential.
Whether you’ve had a few late payments or more serious issues, we’ll build your case, handle the paperwork, and guide you to lenders that actually understand your situation.
If you’d like to explore your options, let’s talk it through. We’ll help you find a buy-to-let solution that works for where you are now — and where you want to be next.