Can I get a mortgage with bad credit?
Yes, many people with past credit problems get mortgages. Specialist lenders consider missed payments, defaults, CCJs, debt management plans, IVAs and bankruptcy. Some high-street lenders also accept minor or older issues.
What matters most is the severity, the amount, how recent it was and whether it is settled. A small default from four years ago is viewed very differently from recent missed mortgage payments. Rates and fees may be higher with specialist lenders, but they often improve as your record gets cleaner.
Life events often sit behind credit problems, such as illness, job loss, divorce or a failed business. Lenders cannot ignore the record, but a clear explanation and evidence of recovery can help some underwriters see the full picture.
Months 1 to 2: check all three credit files
Start by getting your credit reports from the three main credit reference agencies. Lenders may use any of them, and each can hold different information. Read every entry carefully.
- List every missed payment, default, CCJ or arrangement, with dates and amounts.
- Dispute any errors with the agency and the lender concerned.
- Register on the electoral roll at your current address.
- Close old accounts you no longer use, where sensible.
- Remove financial links to former partners if you no longer share finances.
This list becomes the basis of your mortgage conversation. Being upfront helps a broker pick the right lender first time.
Months 2 to 4: settle what you can
Settled defaults and CCJs are usually viewed more favourably than unsettled ones. If you can afford to, clear outstanding balances. For a CCJ, apply for a certificate of satisfaction once paid, so the register shows it as settled.
Do not take on new borrowing to pay old debts without advice. Consolidating debts into one loan can cost more overall and may not help your mortgage application. If you are struggling, free debt advice is available from organisations such as MoneyHelper.
Keep paperwork for every settlement, such as letters confirming a balance is paid. Credit files can take a few weeks to update, and lenders may ask for proof in the meantime.
Months 3 to 12: build a clean recent record
Lenders place most weight on your recent history. Twelve months of on-time payments can make a real difference. Keep every bill, credit card and loan payment on time, even small ones.
- Keep credit card balances well below their limits.
- Avoid payday loans entirely, as many lenders decline them.
- Do not apply for new credit unless essential.
- Keep your bank account in credit and avoid unarranged overdrafts.
- Avoid gambling transactions on your statements.
Some people use a credit builder card, paid off in full each month. Used carefully, it can show responsible borrowing.
Set up direct debits for every regular bill, so nothing is missed by accident. Check your credit files every few months to confirm new payments are reported correctly. Steady progress is what lenders want to see.
Months 1 to 12: grow your deposit
A larger deposit can widen your lender choice and improve terms. Adverse credit lenders often ask for 10% to 25%, depending on severity. Every extra few percent may move you into a better loan-to-value band.
Save regularly into an account in your name, so lenders can see the money building up. Gifted deposits from family are accepted by many lenders. Keep records of where your deposit comes from, as lenders must check its source.
Month 12: choose the right lender, once
Applying to the wrong lender can lead to a decline and another search on your file. Each lender has its own rules for each type of credit issue. Some care most about the last 12 months. Others look back six years.
A specialist broker can match your history to lenders likely to accept it. Some lenders offer an initial assessment with a soft search. OMB reviews your credit files with you and compares high-street and specialist options. Some borrowers start with a specialist deal and remortgage to a mainstream lender later, once their record improves.
What are the risks?
Specialist mortgages can cost more, and some carry higher fees or early repayment charges. Make sure the payments are affordable now and if rates rise. Check what happens at the end of the initial deal, and plan to review it well before then. Your home may be repossessed if you do not keep up repayments on your mortgage. See our adverse credit mortgages page for more detail.
Twelve months is a guide, not a rule. Some people can apply sooner, and others benefit from waiting longer. A short conversation can help you decide.
Adverse credit mortgagesMortgage options if you have missed payments, defaults, CCJs or past insolvency on your credit file.
Explore adverse credit mortgagesFrequently asked questions
How long after a default can I get a mortgage?
It depends on the lender and the default. Some specialist lenders consider recent defaults, especially small or settled ones. Mainstream lenders often prefer defaults to be several years old. Defaults stay on your credit file for six years, but their impact usually fades over time.
Can I get a mortgage with a CCJ?
Yes, some lenders accept CCJs, particularly if they are settled, small or more than a year or two old. Recent or unsettled CCJs narrow your options. Get a certificate of satisfaction once paid, so your record shows the debt as settled.
Does a debt management plan stop me getting a mortgage?
Not always. Some specialist lenders consider applicants in a debt management plan, or who have completed one, often with a conduct record of regular payments. A completed plan with a period of clean credit since is usually viewed more favourably.
Will checking my credit file harm my score?
No. Checking your own credit file is a soft search and does not affect your score or show to lenders. Hard searches, made when you apply for credit, do appear. That is why checking your files first and choosing the right lender matters.
Are bad credit mortgages more expensive?
They can be. Specialist lenders may charge higher rates and fees to reflect the extra risk. Costs often depend on how serious and how recent your credit issues are. Many borrowers remortgage to a cheaper deal once their record improves.
Should I consolidate debts into my mortgage?
It can lower monthly payments, but it may cost more overall because short-term debts are spread over a long term. The debts also become secured on your home. Consider the total cost and alternatives, and take advice before deciding. Free debt advice is available from MoneyHelper.
Important: This guide is general information, not personal advice. Rules, rates and lender criteria change; speak to an adviser about your circumstances. Your home may be repossessed if you do not keep up repayments on your mortgage.