Can I Get a Mortgage with Bad Credit?
If you’ve found yourself asking “Can I get a mortgage with bad credit?”, you’re certainly not alone.
It’s one of the most common questions we hear from prospective homebuyers. In fact, one of the biggest misconceptions we come across is that having bad credit automatically means getting a mortgage is impossible.
The reality is often very different.
While bad credit can make obtaining a mortgage more challenging, it doesn’t necessarily mean you won’t be able to secure one. Every case is unique, and there are lenders who specialise in helping people who have experienced credit difficulties in the past.
The key is understanding how lenders assess bad credit, what options may be available, and what steps you can take to improve your chances of approval.
The Short Answer
Yes, you may still be able to get a mortgage with bad credit.
Whether you can secure a mortgage will depend on factors such as:
- The type of bad credit you have
- How recent the adverse credit is
- Whether any debts have been satisfied
- Your deposit amount
- Your income and affordability
- Your overall financial circumstances
Many people assume that one default, CCJ or missed payment means an automatic decline. In our experience, that’s simply not true.
We’ve spoken to many clients who were convinced they had no chance of getting a mortgage, only to discover there were lenders willing to consider their circumstances.
What Is Considered Bad Credit?
Bad credit is a general term used to describe negative information recorded on your credit report.
Examples include:
- Missed payments
- Late payments
- Defaults
- County Court Judgments (CCJs)
- Debt Management Plans (DMPs)
- Individual Voluntary Arrangements (IVAs)
- Bankruptcy
- Mortgage arrears
- Payday loans
- High levels of unsecured debt
Not all bad credit is viewed equally by lenders.
A satisfied default from four years ago is typically viewed very differently from multiple missed payments over the last six months.
This is why it’s important not to compare your situation to someone else’s. Lenders assess the full picture rather than simply looking at whether you’ve had credit issues.
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The Biggest Myth About Bad Credit Mortgages
The most common misconception we hear is:
“I’ve got bad credit, so I can’t get a mortgage.”
This belief often stops people from even exploring their options.
In reality, many people with adverse credit go on to secure a mortgage.
What often surprises people is that the bad credit itself isn’t always the biggest issue.
More commonly, applications become difficult because:
- The adverse credit is very recent
- The deposit is too small
- Affordability doesn’t work
- There are too many existing credit commitments
We’ve also seen many cases where clients believe their credit is far worse than it actually is.
Sometimes a client will contact us expecting the worst, only for their credit report to show relatively minor issues that may still fit within the criteria of certain lenders.
What Matters Most To Mortgage Lenders?
When assessing a mortgage application involving bad credit, lenders typically focus on several key areas.
The Type And Amount Of Bad Credit
Lenders want to understand:
- What happened?
- How much was involved?
- Was it a one-off issue?
- Has the debt been satisfied?
- Is there a pattern of financial difficulty?
Generally speaking, the more severe and recent the adverse credit, the more challenging it can become to find suitable lenders.
How Recent The Credit Problems Are
The age of the bad credit can have a significant impact on your options.
As a general guide:
- Many specialist lenders prefer no new defaults or CCJs within the last 6 months.
- Adverse credit within the last 12-24 months often requires larger deposits.
- Once credit issues are over 3 years old, more lender options may become available.
- After 6 years, many adverse entries will no longer appear on standard credit reports.
This doesn’t mean you automatically need to wait six years before applying.
Many specialist lenders are willing to consider applications long before that point.
Your Deposit
Deposit size is often one of the most important factors in bad credit cases.
From our experience:
- 10% to 15% is often the sweet spot.
- Some lenders may consider 5% deposits depending on the severity and age of the adverse credit.
- Larger deposits can increase the number of available options.
One of the biggest myths we hear is that anyone with bad credit automatically needs a 25% deposit.
Whilst a larger deposit can help, it isn’t always necessary.
Income And Affordability
Affordability plays a huge role in mortgage decisions.
We’ve seen situations where the bad credit wasn’t actually the main obstacle. Instead, the issue was that the applicant had too many existing commitments, reducing their affordability.
Lenders will consider:
- Credit card balances
- Loans
- Car finance
- Existing mortgages
- Household expenditure
- Dependants
- Other financial commitments
Even with historic adverse credit, the mortgage still needs to be affordable.
Why Do People End Up With Bad Credit?
One thing we’ve learned from helping clients over the years is that bad credit rarely tells the full story.
Behind many adverse credit cases is a genuine life event.
Common reasons include:
- Divorce
- Separation
- Relationship breakdowns
- Redundancy
- Illness
- Maternity leave
- Business difficulties
- Cost of living pressures
Life doesn’t always go according to plan.
Specialist lenders often understand this and may be prepared to consider the circumstances surrounding the adverse credit rather than simply applying a blanket decline.
Why High Street Banks Often Say No
Many people assume that if a bank says no, every lender will say no.
This simply isn’t true.
High street lenders typically have stricter criteria and can only offer their own products.
If you don’t fit their criteria, there is very little flexibility available.
Specialist lenders often take a different approach.
Rather than simply looking at whether a default exists, they may consider:
- How old it is
- Whether it has been satisfied
- Why it happened
- What your financial situation looks like today
We’ve seen numerous examples where clients have been declined by a mainstream lender because of a historic credit issue, only to secure a mortgage through a specialist lender.
What Specialist Lenders Understand
One of the biggest differences is that specialist lenders often recognise that life happens.
They understand that:
- Relationships break down
- Businesses sometimes fail
- People lose jobs
- Illness can impact finances
- Unexpected events can affect credit records
That doesn’t mean they’ll ignore adverse credit altogether.
However, many specialist lenders are willing to consider cases where the credit issues are historic and the applicant has demonstrated financial stability since.
In many cases, they don’t require applicants to wait six years before considering a mortgage application.
Common Reasons Mortgage Applications Get Declined
While bad credit can contribute to a decline, it isn’t always the main reason.
Some of the most common issues we see include:
Not Being Fully Honest Upfront
Lenders will verify information.
If income, debts or adverse credit are omitted, problems can arise later in the process.
Too Much Existing Debt
Even if a lender is comfortable with the adverse credit, affordability still needs to work.
High levels of existing borrowing can significantly reduce the amount available.
Insufficient Deposit
Some lenders simply won’t consider certain levels of adverse credit with a small deposit.
Recent Adverse Credit
The more recent the issue, the fewer options are generally available.
What We’ve Learned From Helping Clients With Bad Credit
After helping countless clients with adverse credit enquiries, several themes emerge time and time again.
Many people:
- Think they need to wait six years before applying.
- Believe paying off a default immediately removes it from their credit file.
- Underestimate the importance of affordability.
- Overestimate how bad their credit actually is.
- Assume all lenders assess applications in the same way.
The reality is that mortgage lending is rarely black and white.
What one lender declines, another may be willing to consider.
Should You Wait Six Years Before Applying?
Not necessarily.
This is another common myth.
While adverse credit typically remains visible on your credit report for six years, that doesn’t mean you need to wait until it disappears before applying.
Depending on the circumstances, specialist lenders may consider applications much sooner.
We’ve seen situations where clients assumed they had years to wait when there were potentially options available immediately.
The only way to know for certain is to assess your individual circumstances.
What Should You Do Before Applying?
If you’re considering a mortgage with bad credit, there are several things you can do to improve your chances.
Review Your Credit Report
Don’t rely on assumptions.
Check exactly what is being reported and ensure the information is accurate.
Save As Much Deposit As Possible
Generally speaking, larger deposits create more options.
Check Affordability
Consider:
- Mortgage payments
- Household bills
- Existing commitments
- Future costs
Research Property Prices
Understand what may be realistic within your budget.
Budget For Protection Insurance
When budgeting for a property purchase, don’t just focus on the mortgage payment.
It’s sensible to consider protection arrangements that could help provide financial security should circumstances change in the future.
Common Mistakes To Avoid
Closing Credit Accounts Unnecessarily
Many people believe closing accounts automatically improves their chances.
This isn’t always the case.
Taking Out Additional Credit
Some applicants take out new credit shortly before applying, which can negatively affect affordability.
Using High Interest Credit Products
Some products are marketed as helping improve credit scores but may be viewed negatively by certain lenders.
Assuming Paid Off Means Invisible
Paying off a CCJ or default is usually positive, but it doesn’t mean the entry immediately disappears from your credit file.
Frequently Asked Questions
Can I get a mortgage with a CCJ?
Potentially, yes. Factors such as the amount, age, whether it has been satisfied and your deposit size will all influence your options.
Can I get a mortgage with defaults?
Possibly. Many lenders assess defaults based on their age, value and circumstances.
How much deposit do I need?
Every case is different, but in our experience 10%-15% is often where options begin to improve significantly.
Can I get a mortgage after bankruptcy?
Potentially. Many lenders will want the bankruptcy to be discharged and for a suitable period of time to have passed.
Will paying off my bad debt improve my chances?
In many cases, yes. However, paying off a debt doesn’t automatically remove it from your credit report.
Final Thoughts
Bad credit doesn’t automatically mean you can’t get a mortgage.
In our experience, many people rule themselves out far too early.
Whilst there will always be situations where options are limited, there are also many cases where people are pleasantly surprised by what may be possible.
The most important thing is to understand your situation properly rather than making assumptions based on what you’ve heard online or from friends and family.
Every lender has different criteria. What one lender won’t consider, another may.
Most importantly, if you’ve experienced credit difficulties in the past, don’t assume the door is closed.
There may be options available that you haven’t yet explored.
Disclaimer: This article is intended for general information purposes only and should not be considered financial or mortgage advice. Mortgage eligibility and lending criteria vary between lenders and individual circumstances.
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Important information: Mortgage Bridge provides information only and acts as a mortgage introducer. We do not provide mortgage advice or make lender recommendations. We can introduce you to an FCA-regulated mortgage adviser who can provide personalised mortgage advice.