Can I get a mortgage with bad credit?

Buying your own home is a major life goal for many people. Not only does being a homeowner provide a sense of security, but property has consistently proven to be a worthwhile investment.

Statistics show, though, that more than a third of UK homeowners are over the age of 65, indicating that home ownership is only a possibility in later life. Younger people may think they have to wait to get onto the property ladder because they haven’t saved enough for a deposit or they haven’t had time to build up their credit rating.

Mortgage providers can be wary of lending to people with a non-existent or bad credit history and prefer careful borrowers who have a record of repaying their debts on time. Before approving a mortgage, they will look at the last two to six years of a person’s credit report to assess how much risk is involved.

If you’re thinking about buying your first house but you’re worried about your credit rating, you might find this article useful. We’ll go through everything you need to know about getting a mortgage with bad credit and suggest some of the things you can do to try to improve your credit score.

Can I get a mortgage with bad credit?

If you have a low credit score due to things like late or missed payments, County Court Judgements (CCJs) or bankruptcy, you may find it more difficult to get a mortgage, however, a provider that specialises in bad credit mortgages may be able to help you.

You might also be able to increase your chances of getting a mortgage if you put down a larger deposit to offset your risk and improve your credit score by registering to vote, correcting any errors on your report and removing links to ex-partners or old flatmates with poor credit scores.

Continue reading to find out more about getting a mortgage with a poor credit history.

What is bad credit?

Bad credit can refer to anything from missed credit card payments to bankruptcy. Lenders will usually deem someone as having bad credit if they have a poor or low credit rating as a result of having no credit history at all or because of issues such as missed payments (defaults), CCJs or bankruptcy on their credit report.

What is a bad credit mortgage?

Some specialist providers offer bad credit mortgages to borrowers with bad credit, however, interest rates may be higher than they are for customers with good credit and applicants may be required to put down a larger deposit. This is because these types of mortgages carry more risk to the lender.

Specialist mortgage providers tend to be more flexible and will look into the specifics of the credit issues.

Will my mortgage be more expensive if I have bad credit?

As mentioned above, you may have to pay more interest than someone with good credit, which means your mortgage will be more expensive. You might also have to pay higher upfront fees.

But comparing bad credit mortgage rates is tricky because the deals that are offered depend on the specifics of your personal credit history. It is worth noting, though, that if you have a minor blip on your credit report that’s been resolved, you’ll be more likely to get a better rate than someone with more serious issues that are outstanding.

How to get a mortgage with bad credit

If you have a bad credit history, there are some things you can do to improve your chances of being approved for a mortgage:

Check your credit report

A credit report shows things like your past loans, credit cards, overdrafts and certain utility bills and gives you a score, which will be categorised as bad, fair, good or excellent.

You can check your credit file using a credit rating agency like Experian, Equifax or ClearScore. While each of them scores slightly differently, you’ll get a good idea of how you look to mortgage providers and can ensure you approach the right ones. You’ll also be able to update your information and correct any mistakes in order to improve your score.

Don’t make multiple mortgage applications

Each time you apply for a loan or mortgage, the number of hard checks on your credit history increases. Unsuccessful applications can bring your score down, so if you think you might get rejected, you should avoid making multiple applications.

It may be possible for a lender to perform a soft check if you’re applying for a mortgage in principle. These don’t show up on your credit record, however, they may not display everything in your history, so your mortgage application could be rejected later on.

Go through a bad credit mortgage broker

Using a broker that specialises in bad credit mortgages is the best way to ensure your application is approved. They have access to the whole market, so you can be sure you’re getting the best deals.

Reassess your finances

To appear more attractive to lenders, you could try boosting your income and lowering your debt-to-income ratio. As stated earlier, saving extra for a larger deposit can increase your chances of having your mortgage application approved.

What are the credit issues that could affect a mortgage application?

When deciding whether or not to approve your mortgage application, lenders won’t just look at your credit score. They’ll consider the details of your credit history too, including:

  • Bankruptcy
  • CCJs
  • Debt management plans
  • Individual Voluntary Arrangements (IVAs)
  • Defaults
  • Lack of credit history
  • Missed mortgage payments
  • Multiple credit problems
  • Payday loans
  • Repossessions

A bad credit mortgage provider will look into the specifics of any credit issues, such as how old they are, their severity, what caused them and how likely they are to reoccur.

Many providers may be willing to overlook things like missed phone bill payments, however bankruptcies and repossessions are viewed as the most severe type of adverse credit a person can have on their file. Different lenders have different criteria, though, so it’s wise to shop around for one that suits your specific circumstances.

What is a bad credit score?

Your credit score will differ depending on which credit rating agency you use, as they each have different scoring systems.

Here’s what a bad credit score looks like for the UK’s two largest credit rating agencies:

Very bad0-2790-560

How can I lift my credit score?

There are several things you can do to try to increase your credit score and improve your chances of getting a mortgage. Some of these include:

  • Close any inactive accounts
  • Don’t apply for credit shortly before you submit your mortgage application
  • Fix any errors on your credit report
  • Manage your available credit carefully
  • Pay bills on time
  • Register to vote
  • Remove links to ex-partners or old flatmates with bad credit scores
  • Stay out of your overdraft
  • Wait until your financial situation improves

What else do providers look at when considering mortgage applications?

While your credit history plays a huge role in a lender’s decision, they may also look at the following:

  • The property type — If you’re buying a property that’s made out of anything other than bricks and mortar (for example, it has a thatched roof or a steel frame), you may need to go through a provider that specialises in non-standard construction
  • Your age — Some providers won’t lend to people over a certain age, while others won’t have an upper age limit as long as they’re confident the debt can be repaid in retirement
  • Your income — Usually, the more you earn the more you can borrow
  • Your job — If you’re self-employed or you’re relying on bonuses, overtime or commission to get your mortgage approved, you may need to go through a specialist provider
  • Your outgoings — Significant outgoings like dependent children or outstanding loans could affect how much you can borrow

When applying for a mortgage, it’s important to be honest, as lenders conduct thorough searches that will uncover anything you try to hide. You should also be prepared to explain how you got into financial difficulties and what measures you took to remedy the situation.


Mortgage providers can be wary of lending to people with a bad credit history, preferring careful borrowers who have a record of repaying their debts on time. 

If you’re thinking about buying your first house but you’re worried about your credit rating, you’ll be pleased to know that there are providers that specialise in bad credit mortgages.