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Can you get a mortgage with bad credit?

Hoping to buy your dream home but wondering if you can get a mortgage with bad credit? While it is harder, it's not impossible – we’ll look at how you can get a mortgage with a bad credit history.

Before we jump in, it’s worth noting that having bad credit may limit the range of mortgage deals you can apply for, and it may be more expensive.

Here's everything you need to know about getting a mortgage with bad credit to help you get onto the property ladder.


  • Lenders can offer mortgages for first-time buyers and homeowners with bad credit

  • It is always worth checking your credit score before starting a mortgage application

  • There are a couple of clear strategies for improving your credit score

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What is bad credit?

If you have ‘bad credit’, or a poor credit rating, it usually means you have missed or been late with some payments in the past.

This could be utility bill payments, loan repayments or any other situation where you failed to pay on time, or in full.

Another factor that can harm your credit record is applying for credit a lot, or being ordered to pay someone money as the result of legal action.

Also, never applying for credit can damage your rating, as you don’t have a proven record of repaying money.

You can find out more about what can harm your credit score, so you can avoid these in the future.

Your credit history is one of the key factors that lenders use to assess whether or not they’ll give you a mortgage, and how generous that deal may be.

The good news is that lenders offer mortgages for first-time buyers and homeowners with bad credit, and the process is similar to a regular mortgage application.

Getting a mortgage with bad credit

Whether you want to buy a house or remortgage, remember there are different types of ‘bad credit’, and these are treated in different ways.

So first, you need to get an idea of how your particular credit situation will appear to a lender.

A lender will be reluctant to approve your mortgage if you have:

  • Defaulted on a loan, including a payday one.

  • Had any items repossessed.

  • Been issued a county court judgement (CCJ) in the last 12 months relating to debt that is secured against a property or asset.

However, after a year or two has passed, lenders may be more willing to accept your application.

You might still need a large deposit (at least 25%) or, if you are remortgaging, a lot of equity, which will make you less of a lending risk.

Anything else you can do to convince lenders that you are low-risk is worth trying.

Lenders may be more willing to approve a mortgage if your adverse credit relates to unsecured finance. This means that while you had a debt you failed to repay, it wasn’t secured against any property or assets.

Lenders may be happy accepting a mortgage application if you have late payments, defaults and CCJs for unsecured finance.

Even applicants who have declared bankruptcy may be successful, but again you are likely to need at least a 25% deposit.

It is also possible to have a steady source of income, but still have a poor credit history.

Lenders prefer applicants with reliable incomes as it means you are more likely to make every payment, but the type of bad credit you have could still affect your application.

It is worth speaking to a mortgage broker who specialises in deals for those with bad credit.

Unbiased can quickly connect you with a mortgage broker who may be able to find the best deal based on your circumstances.

You can find out how much money you might be able to borrow using Unbiased’s mortgage repayment calculator.

What credit score do I need?

Your credit score is a rating assigned to you by credit reference agencies based on your financial history.  

Different agencies using their own unique systems and will give you different scores, so they aren’t comparable, but lenders will use one or more of your credit scores to assess your application.

Generally, lower credit ratings indicate a history of poor credit, and many lenders will have a minimum threshold – if you are below this, they won’t consider an application.

Your mortgage broker can give you a clear idea of where you sit with different banks based on your credit score and may be able to suggest measures you can take to improve it.

Above all, remember that lenders have different thresholds, so a rejection from one doesn’t mean you won’t get accepted by another.

How can I check my credit score?

It is always worth checking your credit score before starting a mortgage application.

The big three credit rating agencies are Experian, Equifax and TransUnion.

You can ask your mortgage broker which of these they recommend.

How can I get a mortgage with bad credit?

There are a couple of clear strategies for improving your credit score, but no quick fixes.

Most importantly, make an effort to pay back your debts, especially any secured debts.

You should also get rid of things such as old phone contracts or shared bank accounts that could affect your rating.

You should make sure you’re on the electoral roll and ensure there are no errors on your credit report.

It will take time for your credit score to recover, but making these changes now will have an impact.

As you will be seen as a risky proposition to lenders, prepare as much as possible. So, you should try to save a large deposit, as your lender could require you to have at least 25% of the property’s value.

It can be a tough decision, especially for first-time buyers, but delaying your plans by six months to focus on improving your credit score can have a big impact on the rates you are able to get.

Another option, if you can get help from your family, is to look at a guarantor mortgage where someone else, such as a parent, agrees to cover any repayments you may miss.

Can a bad credit mortgage broker help me?

Many mortgage brokers have experience in helping those with bad credit.

They can search the whole market and choose lenders most likely to offer you deals, and suggest ways to strengthen your application.

A mortgage broker can be useful if your fixed-term mortgage is due to end and you are worried your credit history will make it harder to get a new deal.

What happens if I need to remortgage with bad credit?

It’s possible to remortgage with bad credit, especially as paying your current mortgage repayments should have boosted your credit score.

If you initially got your mortgage from a specialist lender, your improved credit score may let you remortgage with a high-street bank or building society with potentially better rates.

However, there are risks. Sometimes the terms of a new mortgage deal may be more stringent than your current deal – even if your current deal is costing you more.

Some people with poor credit are told they can’t afford monthly repayments that are less than their current ones.

These people have become known as ‘mortgage prisoners’ who are stuck on expensive deals and unable to switch.

If your poor credit history has made you a mortgage prisoner, then a mortgage broker may be able to help.

Some brokers have access to all mortgages on the market, including deals not found on the high street or via comparison sites.

Also, different lenders will have various criteria. Although some may not accept any late payments over the last two years, others will be fine with one instance in the last six months.

Read our guide to remortgaging to get the information you need to make the process as smooth as possible.

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Bad credit mortgage FAQs

Can I get a mortgage if I have an existing default?

You can, but it will depend on the lender. A mortgage broker will be able to tell you which ones might accept your application.

Are there mortgage lenders that don't look at your credit score?

There are, although it’s rare, and it doesn’t mean they won’t take your financial history into account. A lender may not use your current credit score, but they will still perform a credit check.

Can I get a guaranteed mortgage approval if I have bad credit?

Unfortunately, guaranteed or pre-approved mortgages for those with bad credit are not offered by lenders.

Can I buy a home with no deposit and a bad credit history?

It will be difficult to find a 100% mortgage if you have a bad credit history. Many lenders will find applicants too risky without a deposit, so a guarantor mortgage may be worth looking into.

Can I get a Right to Buy mortgage with bad credit?

Right to Buy mortgages help people buy the council house or flat they currently rent. It is possible to get one of these mortgages with bad credit, but individual lenders will have different criteria.

Need help getting on the property ladder?

Unbiased can quickly connect you with a qualified mortgage broker who can look at your unique circumstances, find you the best deal and boost your chances of a successful application.

Get mortgage advice
We’ll find a professional perfectly matched to your needs. Getting started is easy, fast and free.

About the author
Nick Green is a financial journalist writing for Unbiased.co.uk, the site that has helped over 10 million people find financial, business and legal advice. Nick has been writing professionally on money and business topics for over 15 years, and has previously written for leading accountancy firms PKF and BDO.