Can You Get a Mortgage While Rebuilding Your Credit?

Many people assume that rebuilding their credit means waiting years before applying for a mortgage. In reality, you can get a mortgage while rebuilding your credit, but lenders will look closely at your recent behaviour, your overall financial stability and how far along your credit recovery is.

Whether you’re recovering from past defaults, missed payments, high utilisation or a CCJ, the key factor is demonstrating that the issues are behind you and that your finances are now well managed.

This guide explains how lenders assess applications during credit rebuilding, what you can realistically expect, and how to strengthen your mortgage chances. This article provides general information only and does not offer regulated mortgage advice.

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Can You Get a Mortgage While Rebuilding Your Credit?

Yes — many borrowers secure mortgages even while their credit file is still recovering.
Your chances depend on:

• The type of credit issues you had
• How long ago they occurred
• Whether they are settled
• Your recent payment history
• Bank statement conduct
• Deposit size
• Income stability

Rebuilding credit is not a single marker on your file; lenders look at the full financial picture.

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What Counts as “Rebuilding Credit”?

You may be rebuilding credit if you have recently:

• Settled old debts
• Completed a DMP or arrangement
• Reduced high card balances
• Corrected errors on your report
• Started using a credit builder card
• Recovered from missed payments
• Improved bank statement conduct

These positive actions help, but lenders want to ensure the improvements are stable and consistent.

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What Lenders Look for When You’re Rebuilding Your Credit

Mortgage lenders focus heavily on recency, stability and evidence of positive change.

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1. Your Recent Payment Behaviour

The last 6–12 months often matter more than older issues. Lenders want to see:

• No missed or late payments
• Direct debits paid reliably
• Predictable credit usage
• Gradual improvement in balances

Consistency is more important than a high score.

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2. Type and Age of Previous Adverse Credit

Lenders assess:

• How severe the issues were
• How long ago they occurred
• Whether they are settled

Generally:

• Defaults/CCJs under 12 months old → fewer options
• Issues 1–3 years old → wider lender choice
• Issues 3–6 years old → often treated as lower risk

Older issues carry less weight, especially with clean conduct since.

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3. Deposit Size

Deposit significantly affects your options.

• 5% deposit → possible only if recent conduct is excellent and issues are mild
• 10%–15% deposit → more realistic for those actively rebuilding
• 20%–25% deposit → opens up wider lender choice even with recent issues

A larger deposit reduces lender risk and offsets some credit concerns.

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4. Bank Statement Conduct

Underwriters examine the last 3–6 months for:

• Unarranged overdrafts
• Returned payments
• Gambling transactions
• Irregular spending
• High discretionary costs

Strong bank conduct can often outweigh older credit problems.

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5. Affordability and Income Stability

Lenders check:

• Employment stability
• Regular income patterns
• Reliance on bonuses or overtime
• Commitments such as loans, childcare, credit cards

Even with restored credit, affordability still needs to be sustainable.

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Specialist Lenders and Credit Rebuilding

If high-street banks are hesitant, specialist lenders often provide realistic options. They use manual underwriting, meaning they review:

• Your explanation
• Evidence of financial improvement
• Bank statements
• Deposit strength
• Overall risk

Rates may be higher initially, but many borrowers remortgage to a mainstream lender once their credit fully improves.

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How Long Should You Wait Before Applying?

There’s no universal rule. It depends on:

1. How recent the problems were

If adverse credit is very recent (0–6 months), waiting a little longer may help.

2. How stable your financial behaviour is now

Lenders want reassurance that improvements are consistent.

3. Whether your file still shows active issues

All defaults, CCJs and arrears should be shown correctly as settled if applicable.

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Steps to Improve Your Chances of Getting a Mortgage While Rebuilding

(General Information Only)

1. Build at Least 6 Months of Perfect Conduct

The cleaner your recent history, the stronger your application.

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2. Reduce Credit Utilisation

Aim to bring balances under 30% where possible.

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3. Avoid New Credit Before Applying

New credit reduces affordability and may heighten perceived risk.

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4. Keep Spending Predictable

Stable bank behaviour is reassuring to underwriters.

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5. Check All Three Credit Files

Review:

• Equifax
• Experian
• TransUnion

Ensure your rebuilding progress is accurately reflected.

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6. Gather Clear Documentation

Have ready:

• Payslips
• Bank statements
• Deposit evidence
• ID and address proof
• Explanation of past issues if needed

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7. Strengthen Your Deposit

A higher deposit improves lender choice and reduces reliance on credit scoring.

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Common Scenarios When Rebuilding Credit

Scenario 1: Settled default from two years ago

Often acceptable with a 10% deposit and strong recent conduct.

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Scenario 2: High utilisation recently reduced

Lenders may want one to two more months of clean behaviour but options open quickly.

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Scenario 3: CCJ satisfied over one year ago

Specialist lenders may accept with a suitable deposit.

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Scenario 4: Recovering from a recent late payment

Waiting 3–6 months can improve approval prospects.

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Scenario 5: Completed DMP

Options vary depending on recency and deposit size.

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Summary

Getting a mortgage while rebuilding your credit is achievable. Lenders look at the whole picture, focusing on:

• How recent the issues were
• Whether they’re resolved or settled
• Your current payment behaviour
• Bank statement conduct
• Deposit strength
• Income stability

Many borrowers secure mortgages with specialist lenders during their rebuilding stage before moving to mainstream products later.

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