Can You Get a Mortgage With Bad Credit?

If your credit history has a few bumps, you might assume a mortgage is off the table. For most people, it isn't. High street banks tightened up after the rate rises of 2023 to 24, but a whole set of specialist lenders exist precisely to help borrowers the big banks turn away. The key is knowing how they think, and matching your situation to the right one.

What counts as "bad credit"?

"Adverse credit" covers a range of markers on your file, roughly from mild to serious: late or missed payments, defaults, County Court Judgments (CCJs), debt management plans (DMPs), Individual Voluntary Arrangements (IVAs), bankruptcy and repossession. Most of these stay on your credit file for six years, but their impact fades as they age and as you show a clean record since.

Yes, it's usually still possible

Mortgages for adverse credit work just like any other mortgage; the difference is who will lend and on what terms. There are three broad tiers: high street banks (best rates, but they shy away from recent or serious issues), building societies (often more flexible, with human underwriting), and specialist adverse-credit lenders who assess each case by hand and lend where others won't.

What lenders actually look at

It's rarely a simple yes/no on a credit score. Lenders weigh up: how recent the issues are (the last 2 to 3 years matter most), how serious they were, how settled they are now (satisfied defaults look far better than ongoing ones), your deposit, and the stability of your income. A strong, steady picture today can outweigh an old blip.

What it might cost

Two things tend to be higher than the best high-street deals: the deposit and the rate. For small, historic issues you may get close to standard terms; for recent or serious adverse credit, expect specialist lenders to want a larger deposit (sometimes 15 to 35%+) and to charge a somewhat higher rate to reflect the risk. The good news: once you've held the mortgage and your file keeps improving, you can often remortgage onto a better deal later.

How to improve your chances before you apply

A few things genuinely move the needle: check your credit file early (and fix any errors), make sure you're on the electoral roll, bring down other debts where you can, avoid multiple credit applications in a short space of time, and build the biggest deposit you reasonably can. It's also worth understanding how affordability works so you apply for a realistic amount.

Why a broker makes the real difference

This is the part that matters most with adverse credit. Many specialist lenders don't deal with the public directly, and their criteria differ wildly, one will accept a two-year-old default, another won't. A whole-of-market broker knows which lender fits which situation, so you apply once, to the right place, instead of collecting rejections that dent your score further. If you're early in the journey, our first-time buyer guide and the application process guide are useful companions.

If your credit's been less than perfect and you'd like to know where you really stand, Debbie at DS Financial deals with adverse-credit cases sensitively and whole-of-market, a no-pressure chat costs nothing.

General information, not financial advice. Lending criteria vary and nothing here is a guarantee of acceptance. Your home may be repossessed if you do not keep up repayments on your mortgage.

Sources: HomeOwners Alliance, Experian, MoneyHelper.