How to Get a Mortgage with Bad Credit: Tips and Options for Poor Credit Scores

If you have a poor credit score or past credit issues, it is common to worry that getting a mortgage may not be possible. Missed payments, defaults, or other financial difficulties can make the mortgage process feel uncertain. However, a mortgage with bad credit is not automatically out of reach.

UK mortgage lenders assess applications based on a combination of factors, not just credit score alone. This guide explains how bad credit is viewed in a mortgage context, how lenders assess applications with poor credit scores, and the general options and considerations for borrowers in this position. The content below is intended as general guidance only.

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What Is Considered Bad Credit for a Mortgage?

Bad credit is not defined by a single score or threshold. Instead, it refers to negative information recorded on a credit report. This may include:

• Missed or late payments
• Defaults on credit agreements
• County Court Judgments (CCJs)
• Debt management plans
• Individual Voluntary Arrangements (IVAs)
• Bankruptcy, including discharged cases
• High levels of unsecured borrowing

Different lenders have different tolerance levels for these issues. The same credit history may be acceptable to one lender and unacceptable to another.

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Credit Scores vs Credit Reports

When applying for a mortgage, lenders do not rely solely on a credit score. Instead, they review the full credit report to understand patterns of behaviour over time.

A credit report shows:

• Types of credit used
• Payment history
• Outstanding balances
• Credit limits and utilisation
• Public record information
• Recent credit applications

A low credit score may flag potential risk, but lenders usually want to understand the reasons behind it.

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Can You Get a Mortgage with Bad Credit?

In general terms, it may be possible to get a mortgage with bad credit, depending on individual circumstances.

Lenders often consider:

• The type of credit issues
• How recent those issues were
• Whether problems were isolated or repeated
• Whether debts are settled or ongoing
• Income stability and affordability
• Deposit size and loan-to-value (LTV)

A single historic missed payment is usually viewed very differently from multiple recent defaults.

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The Importance of Recency

Recency plays a significant role in mortgage decisions.

• Older credit issues, such as those several years ago, often have less impact
• Recent credit issues, particularly within the last 6 to 12 months, are usually assessed more cautiously

Many lenders apply minimum timeframes since the last adverse credit event, while others assess applications on a case-by-case basis.

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Types of Bad Credit and How Lenders View Them

Not all adverse credit is treated equally.

Missed Payments

Occasional missed payments may be viewed with flexibility if they are historic and followed by a period of good conduct.

Defaults

Defaults suggest more serious financial difficulty. Lenders often assess the amount, age, and whether the default has been settled.

CCJs

CCJs can significantly reduce lender choice, especially if they are recent or unpaid.

Insolvency

IVAs and bankruptcy are typically viewed as higher risk. Many lenders require these to be discharged for a certain period before considering an application.

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Deposit Size and Loan-to-Value (LTV)

Deposit size is often a key factor when applying for a mortgage with bad credit.

Lower LTV mortgages:

• Reduce the lender’s risk
• May increase the number of lenders willing to consider the application
• Can lead to more competitive interest rates

Applicants with bad credit may find higher LTV options more limited, particularly at 95%.

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Affordability and Income Stability

Affordability is assessed independently of credit history. Even where bad credit exists, lenders must be satisfied that the mortgage is affordable.

Affordability assessments typically include:

• Verified income
• Household and lifestyle expenditure
• Existing credit commitments
• Stress testing against higher interest rates

Stable income and manageable outgoings can help demonstrate that past credit issues are not ongoing.

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Employment Status and Bad Credit

Employment stability can influence how lenders view bad credit.

Lenders may consider:

• Length of time in employment or self-employment
• Consistency of income
• Type of employment (employed, self-employed, contractor)

A stable employment record can support an application, even where credit history is less than perfect.

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Specialist vs Mainstream Lenders

Some mainstream lenders apply strict credit criteria and may decline applications with adverse credit. Others are more flexible, depending on circumstances.

There are also specialist lenders who focus on borrowers with non-standard credit histories. These lenders may consider applications that fall outside mainstream criteria, but products may involve:

• Higher interest rates
• Larger deposit requirements
• Additional fees

Lender criteria and availability change over time.

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Options People Often Explore with Bad Credit

While outcomes vary, borrowers with bad credit often explore the following options:

Allowing Time to Pass

Older credit issues generally carry less weight than recent ones, particularly where financial behaviour has improved.

Reducing Existing Debt

Lower unsecured balances can improve affordability calculations.

Checking Credit Reports for Errors

Incorrect information can sometimes be disputed and corrected.

Avoiding Frequent Credit Applications

Multiple recent applications can negatively affect how lenders view risk.

These steps do not guarantee mortgage approval but may improve overall lender confidence.

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First Time Buyers with Bad Credit

First time buyers with bad credit are assessed in the same way as other applicants. Some housing schemes may be explored by eligible buyers, but full credit and affordability checks still apply.

Being a first time buyer does not remove the impact of adverse credit.

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Buy-to-Let Mortgages and Bad Credit

Buy-to-let mortgages are assessed primarily on rental income, but personal credit history is still reviewed. Bad credit can limit lender options and affect available terms.

Buy-to-let lending is not designed to bypass credit assessment.

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How Long Does Bad Credit Stay on Your Credit File?

Most adverse credit entries remain on a credit report for up to six years from the date they occurred. Over time, their influence may reduce, particularly where recent financial behaviour is positive.

Entries are not usually removed early, even if debts are settled.

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Common Misconceptions About Bad Credit Mortgages

“Bad Credit Means No Mortgage”

This is not always true. Many applicants with adverse credit have successfully obtained mortgages.

“Only Credit Score Matters”

Lenders review the full credit report, not just a single number.

“A Bigger Deposit Guarantees Approval”

A larger deposit can help, but affordability and credit history are still assessed.

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Preparing to Apply for a Mortgage with Bad Credit

People in this position often prepare by:

• Reviewing their full credit report
• Understanding the age and type of credit issues
• Setting realistic expectations on borrowing and rates
• Checking deposit and affordability requirements

Preparation can help reduce uncertainty during the application process.

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Summary

Getting a mortgage with bad credit can be more complex, but it is not automatically ruled out. Lenders assess applications based on the type, timing, and severity of credit issues alongside income, affordability, deposit size, and overall financial stability.

Understanding how lenders view poor credit scores and what factors influence decisions can help borrowers approach the mortgage process with clearer expectations.

This article provides general information only. For personalised guidance, regulated mortgage advice is required.