Can I get a mortgage with bad credit UK?

Yes — but your options are more limited and rates will be higher. Specialist lenders consider applicants with CCJs, defaults, missed payments, IVAs, and even discharged bankruptcy. The key factors are how recent the issues are, how severe they were, the size of your deposit, and your current income. A specialist mortgage broker is essential — they know which lenders accept which types of adverse credit.

How long does bad credit affect a mortgage application?

Most adverse credit markers stay on your credit file for 6 years. After 6 years, they drop off and lenders can no longer see them. However, many lenders apply their own rules: some accept CCJs over 3 years old, others want them satisfied. The more time that has passed and the more you can show your finances have improved, the better your options.

How much deposit do I need with bad credit?

Generally, the larger the deposit the better. Most specialist lenders require a minimum of 15%–25% deposit for applicants with poor credit. Some may accept 10% for minor issues (a single missed payment over 3 years ago). The higher your deposit, the better rates you'll access and the more lenders will consider you.

Should I use a mortgage broker if I have bad credit?

Absolutely — a specialist mortgage broker is almost essential. They know exactly which lenders accept your specific type of adverse credit (CCJs, defaults, IVAs, etc.), can present your application in the best light, and save you from applying to lenders who would decline you (each declined application adds a hard search to your credit file and makes things worse).

Buying a House with Bad Credit UK — Your Options Explained | PocketWise

Buying a House with Bad Credit UK — Your Options Explained

Can you get a mortgage with bad credit? A guide to what counts as bad credit, which lenders accept it, how to improve your chances, and specialist mortgage options.

By PocketWise · 25 March 2026 · 6 min read

Having bad credit does not automatically prevent you from getting a mortgage. It does make the process harder, more expensive, and requires careful planning. Here is a realistic guide.

What Counts as Bad Credit for Mortgage Lenders?

Issue	Severity	Impact on mortgage
Missed payment (1 or 2)	Mild	Some mainstream lenders will still consider, especially if 2+ years ago
Multiple missed payments	Moderate	Limits options to specialist lenders
Default	Moderate–Severe	Registered on credit file, limits options, deposit requirements higher
CCJ (County Court Judgment)	Severe	Most mainstream lenders decline; specialist lenders may accept
IVA (Individual Voluntary Arrangement)	Severe	Very limited options — specialist lenders only
Debt Management Plan (DMP)	Moderate	Some lenders accept if settled, others decline
Bankruptcy (discharged)	Very severe	Minimum 1–3 years after discharge, specialist lenders only
Repossession	Very severe	Most difficult — very few lenders will consider within 6 years
No credit history	Low	Not bad credit, but “thin file” — can still be problematic
High credit utilisation	Mild	Using over 50% of available credit reduces your score
Payday loans (recent)	Moderate–Severe	Many lenders auto-decline if payday loans within 3–6 years

How Lenders Assess Bad Credit

Lenders look at a combination of factors:

Factor	What they check
Recency	How long ago was the issue? 6 months ago vs 5 years ago
Severity	A single missed payment vs multiple defaults and a CCJ
Frequency	One-off or pattern of problems?
Amount	A £50 default vs a £10,000 CCJ
Satisfied or unsatisfied	Have you paid the debt off or is it still outstanding?
Current behaviour	Have your finances improved since the issues?
Deposit size	Larger deposits reduce lender risk and open more doors
Income stability	Secure employment vs unstable income

Your Options — By Type of Bad Credit

Missed Payments

Detail	Information
How many lenders?	Many mainstream lenders accept 1–2 missed payments if 2+ years ago
Deposit needed	10%–15% typically
Rate premium	0.2%–0.5% above best rates
Best approach	Wait until 2 years from the missed payment if possible

Defaults

Detail	Information
Registered default	Stays on file for 6 years from date of default
Satisfied vs unsatisfied	Satisfied defaults are viewed more favourably — pay them off if possible
How many lenders?	Some mainstream lenders accept small, old, satisfied defaults; larger or recent defaults need specialist lenders
Deposit needed	15%–25%
Rate premium	0.5%–2.0% above best rates

CCJs (County Court Judgments)

Detail	Information
On file	6 years from date of judgment
Satisfied vs unsatisfied	Satisfied = significantly better options
Under £500	Some specialist lenders are more flexible
Over £500	Fewer options — deposit and income must be strong
Deposit needed	15%–25%
Rate premium	1.0%–3.0% above best rates

IVAs (Individual Voluntary Arrangements)

Detail	Information
During IVA	Cannot take on new credit — mortgage not possible
IVA completed and certificate received	Some specialist lenders will consider
Deposit needed	20%–25% minimum
Rate premium	2.0%–4.0% above best rates
Waiting period	Most lenders want 1–3 years after IVA completion

Bankruptcy

Detail	Information
During bankruptcy	Cannot take on new credit
After discharge (usually 12 months)	Very few lenders — specialist only
3+ years after discharge	More options open up
6+ years after discharge	Falls off credit file — mainstream options return
Deposit needed	25%+
Rate premium	2.0%–5.0% above best rates

How to Improve Your Chances

Before Applying

Action	Impact	Timeframe
Satisfy all defaults and CCJs	Shows lenders you’ve dealt with the issue	Do this now
Register on the electoral roll	Improves credit score and identity verification	Immediate effect
Close unused credit accounts	Reduces total available credit (can help affordability)	1–2 months
Keep credit card balances below 30%	Shows responsible credit use	1–3 months
Don’t apply for new credit	Every application leaves a hard search	3–6 months before mortgage application
Set up direct debits for all bills	No more missed payments	6+ months of clean record
Build credit with a credit-builder card	Makes small purchases, pay in full each month	6–12 months
Save the largest deposit possible	Single biggest factor in improving your options	Ongoing
Check your credit report for errors	Incorrect information can be challenged and removed	2–4 weeks for corrections

Check All Three Credit Reports

Agency	Where to check for free
Experian	moneysavingexpert.com/creditclub or Experian app
Equifax	Clearscore (clearscore.com)
TransUnion	Credit Karma (creditkarma.co.uk)

Check all three — lenders use different agencies and your file may differ between them.

Specialist vs Mainstream Lenders

Feature	Mainstream lender	Specialist lender
Examples	Nationwide, HSBC, Barclays, NatWest	Pepper Money, Kensington, Aldermore, Precise Mortgages
Criteria	Clean credit history preferred	Accept varying degrees of adverse credit
Rates	Lowest available	Higher — reflecting additional risk
Deposit	5%–25%	Often 15%–30%
Application	Direct or via broker	Usually broker-only
Assessment	Automated credit scoring	Manual underwriting — human decisions

Manual underwriting means a real person reviews your application and circumstances. This is crucial for people with bad credit — a human can understand context that a computer cannot.

Interest Rates — What to Expect

Credit profile	Typical rate (75% LTV, March 2026)
Excellent credit (990+ Experian)	3.8%–4.2%
Good credit (minor issues, 2+ years old)	4.2%–4.8%
Fair credit (satisfied defaults, 3+ years old)	4.8%–5.5%
Poor credit (recent defaults, CCJs)	5.5%–7.0%
Very poor credit (IVA, bankruptcy discharge)	6.5%–8.5%

These are indicative — your rate depends on your specific circumstances, deposit, and the lender.

Monthly Payment Comparison

How a higher rate affects payments on a £200,000 repayment mortgage over 25 years:

Rate	Monthly payment	Extra per month vs 4.0%	Extra per year
4.0%	£1,056	—	—
5.0%	£1,170	£114	£1,368
6.0%	£1,289	£233	£2,796
7.0%	£1,414	£358	£4,296

Strategy: Accept the higher rate now, make payments on time for 2 years, then remortgage to a better deal as your credit improves.

The Remortgage Strategy

Many people with bad credit follow this approach:

Step	Timing	Action
1	Now	Get a specialist mortgage at a higher rate
2	Month 1–24	Make every payment on time, build credit score
3	2 years	Credit issues are older (some may have dropped off)
4	2 years	Remortgage to a mainstream lender at a better rate
5	6 years	All adverse credit drops off your file — full access to best rates

This “credit repair mortgage” approach means you get on the property ladder now and refinance to cheaper terms as your credit improves.

Common Mistakes

Mistake	Why it’s harmful
Applying to multiple lenders yourself	Each declined application adds a hard search — worsening your credit
Not using a specialist broker	You won’t know which lenders accept your specific issues
Hiding bad credit from the lender	They will find out — and your application will be declined
Taking out payday loans to cover the deposit	Payday loans on your credit file are a major red flag
Not checking your credit report for errors	Incorrect entries could be causing unnecessary declines
Applying too soon after a major issue	Waiting 1–2 years can dramatically improve your options

Useful Links

Your home may be repossessed if you do not keep up repayments on your mortgage. PocketWise provides information and guidance — we do not offer financial advice. Seek independent mortgage advice before making decisions about borrowing.