Can You Get a Mortgage with Bad Credit? Expert Tips for Securing a Mortgage with a Low Credit Score

If you have experienced financial difficulties in the past, you may be concerned about whether getting a mortgage is realistic. Missed payments, defaults, or other credit issues often lead people to believe that a mortgage with bad credit is out of reach.

In reality, bad credit does not automatically prevent a mortgage application. UK mortgage lenders assess applications using a wide range of factors, and credit history is only one part of that process. This guide explains what bad credit means in a mortgage context, how lenders typically assess low credit scores, and what elements can influence outcomes.

The information below is provided for general guidance only and does not constitute regulated mortgage advice.

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What Is Considered Bad Credit?

Bad credit is a broad term used to describe negative information 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 (historic or discharged)
• High levels of unsecured debt

There is no universal definition of bad credit. Different lenders have different tolerance levels, and the same credit issue may be viewed differently depending on context.

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How Credit Scores and Credit Reports Differ

Mortgage lenders do not usually rely on credit scores alone. Instead, they review the full credit report to understand patterns of financial behaviour.

A credit score is a summary indicator, while a credit report shows:

• Types of credit used
• Payment history
• Length of credit history
• Outstanding balances
• Public record information

A low credit score may flag potential risk, but lenders typically want to understand why the score is low rather than relying on the number itself.

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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, but the range of lenders and products available may be more limited.

Mortgage decisions are influenced by:

• The type of credit issues
• How recent those issues were
• How frequently problems occurred
• Whether accounts are now settled
• Overall affordability and deposit size

A single historic issue is often treated very differently from repeated recent problems.

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The Importance of Recency

Recency is one of the most significant factors lenders consider.

• Older credit issues (for example, more than three or four years old) may have less impact
• Recent issues (within the last 6–12 months) are often viewed more cautiously

Many lenders apply time-based criteria, while others assess applications on a case-by-case basis.

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Types of Bad Credit and How They Are Viewed

Not all adverse credit is treated equally.

Missed Payments

Occasional missed payments, particularly on unsecured credit, may be viewed with some flexibility if they are historic and followed by good conduct.

Defaults

Defaults usually indicate more serious financial difficulty and are often assessed based on age, amount, and whether they have been settled.

CCJs

CCJs are court judgments for unpaid debt and can significantly affect lender options, especially if recent or unsatisfied.

Insolvency

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

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How Lenders Assess a Mortgage with Bad Credit

Mortgage lenders assess bad credit applications using a holistic approach.

They typically consider:

• Credit history patterns
• Income stability
• Affordability calculations
• Deposit size and loan-to-value (LTV)
• Employment status
• Property type

Bad credit alone does not determine the outcome, but it influences how the application is assessed.

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Deposit Size and Loan-to-Value (LTV)

Deposit size often plays a crucial role when applying for a mortgage with bad credit.

Lower LTV mortgages:

• Reduce the lender’s risk
• May improve product availability
• Can result in more competitive rates

Applicants with bad credit may find higher LTV options, such as 95%, more limited, while lower LTVs may provide more flexibility.

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Affordability Still Matters

Even where credit issues exist, lenders must be satisfied that the mortgage is affordable.

Affordability assessments include:

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

Strong affordability does not override bad credit, but it forms an important part of the overall assessment.

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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 applicants with non-standard credit histories. These lenders may consider a wider range of credit issues but may offer products with:

• Higher interest rates
• Larger deposit requirements
• Additional fees

Lender criteria and availability can change over time.

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Employment Status and Income Type

Employment stability can influence how lenders view bad credit.

Lenders often assess:

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

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

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Improving Your Position Before Applying

People with bad credit often consider steps to strengthen their overall profile before applying.

These may include:

• Reviewing credit reports for accuracy
• Allowing time to pass since the last credit issue
• Maintaining consistent payment behaviour
• Reducing unsecured debt balances
• Avoiding unnecessary credit applications

These actions do not guarantee acceptance but may help improve lender confidence over time.

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Common Misconceptions About Bad Credit Mortgages

“Bad Credit Means Automatic Rejection”

This is not always true. Outcomes depend on the full financial picture.

“Only Credit Score Matters”

Lenders look at the full credit report, not just the score.

“Time Alone Fixes Everything”

Time can reduce impact, but lenders also look for evidence of improved behaviour.

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First Time Buyers with Bad Credit

First time buyers with bad credit face similar assessments to other applicants. Some schemes, such as shared ownership, may be explored by eligible buyers, but these still involve full credit and affordability checks.

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 differently, with greater emphasis on rental income. However, personal credit history is still reviewed, and bad credit can limit lender options.

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

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How Long Does Bad Credit Stay on a Credit Report?

Most adverse credit entries remain on a credit report for up to six years. Over time, their influence may lessen, particularly where recent financial behaviour has been stable.

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

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Preparing for a Mortgage Application

Applicants with bad credit often prepare by:

• Understanding their credit history clearly
• Setting realistic expectations on borrowing and rates
• Checking deposit and affordability requirements
• Allowing sufficient time before applying

Preparation can help avoid unnecessary declines and delays.

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Summary

A mortgage with bad credit is not automatically out of reach, but it is usually more complex than applying with a clean credit history. Lenders assess the type, timing, and severity of credit issues alongside affordability, deposit size, and income stability.

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

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