A bad credit mortgage is a home loan for borrowers with adverse credit history — including CCJs, defaults, IVAs, missed payments, or bankruptcy. Specialist lenders assess these applications individually, typically requiring a larger deposit of 15–35%.
Getting a Mortgage With Bad Credit
Having bad credit doesn't automatically disqualify you from getting a mortgage. While high-street lenders may decline your application, there are numerous specialist lenders in the UK who specifically cater to applicants with credit issues.
The key is understanding how different lenders view your specific credit history and finding the right match. This is where a specialist mortgage broker adds enormous value.
Types of Credit Issues and Their Impact
Lenders view different credit issues with varying severity. We have dedicated guides for each type:
- Late payments: Minor impact, especially if isolated. Many mainstream lenders overlook 1-2 late payments
- Defaults: More serious. Satisfied defaults over 2 years old are manageable; recent unsatisfied defaults significantly limit options
- CCJs (County Court Judgments): Serious but manageable if satisfied and over 12 months old
- IVAs/Debt Management Plans: Require specialist lenders. Discharged IVAs are easier than active ones
- Bankruptcy: Must be discharged for at least 1 year (most lenders want 3+ years). Specialist lenders only
- Repossession: The most severe — most lenders want at least 3-6 years since the event
If you're looking to consolidate existing debts into your mortgage, see our debt consolidation remortgage guide.
How to Improve Your Chances
- Save a bigger deposit: 15-25% compensates for credit risk in lenders' eyes
- Check your credit report: Ensure there are no errors — dispute any inaccuracies with the credit reference agency
- Register on the electoral roll: This simple step improves your credit score
- Satisfy outstanding debts: Pay off any CCJs or defaults before applying
- Wait if you can: The older the credit issue, the less impact it has
- Use a specialist broker: We know which lenders accept specific types of credit issues
Deposit Requirements With Bad Credit
With bad credit, you'll generally need a larger deposit. While mainstream borrowers can access 5-10% deposit mortgages, those with credit issues typically need:
- Minor issues (old late payments): 10-15%
- Moderate issues (satisfied defaults/CCJs): 15-25%
- Severe issues (IVA, bankruptcy): 20-35%
Ready to explore your options? Get in touch for a free, no-obligation consultation.
Frequently Asked Questions
- Can I get a mortgage with a CCJ?
- Yes. Many specialist lenders consider applicants with CCJs, particularly if they're over 12 months old, under £500, and have been satisfied (paid). Larger or more recent CCJs require specialist advice.
- How long does bad credit affect my mortgage application?
- Most negative marks stay on your credit file for 6 years. However, their impact reduces over time. A default from 5 years ago is viewed very differently from one registered last month.
- Will I pay a higher interest rate with bad credit?
- Usually yes, but not always dramatically. The rate depends on the severity and age of the credit issues, your deposit size, and the lender. A broker can help minimise the premium you pay.
- Can I improve my credit score before applying?
- Yes. Register on the electoral roll, pay off outstanding debts, check your credit report for errors, and avoid multiple credit applications. Even a few months of improvement can make a difference.
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