Bad Credit Mortgages: How to Get Approved in the UK

Getting a mortgage with adverse credit is more achievable than many borrowers expect. Specialist lenders assess applications individually, looking beyond credit scores to consider the full picture of your finances. This guide explains what counts as adverse credit, how lenders assess these cases, what deposit you may need, and the practical steps you can take to strengthen your application. Whether you are a first-time buyer with past credit difficulties or a homeowner looking to remortgage after a financial setback, Mortgage One can search the whole of market to find lenders whose criteria match your circumstances.

Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

For a free initial consultation, call 01202 155992 or contact Mortgage One.

What Counts as Bad Credit on a Mortgage Application

There is no single definition of bad credit, and no universal minimum credit score for a mortgage. Each lender uses its own scoring model, and what one lender treats as a decline could be acceptable to another. However, certain events recorded on your credit file are widely regarded as adverse. These include missed or late payments, defaults, County Court Judgments (CCJs), Individual Voluntary Arrangements (IVAs), debt management plans, bankruptcy, and repossessions.

All adverse credit events remain on your credit file for six years from the date they are recorded. The impact on your mortgage options depends on the type of event, how recently it occurred, the amounts involved, and whether the debt has been satisfied. A single missed payment from four years ago carries far less weight than an active CCJ registered within the past 12 months.

Research from the Pepper Money Specialist Lending Study (2025) found that approximately 30% of UK adults have experienced adverse credit at some point, with around 9.26 million people affected in the preceding three years alone. This means adverse credit is far more common than many borrowers realise, and the specialist lending market exists specifically to serve this demand.

Before applying for any mortgage, it is worth downloading your credit report from all three UK credit reference agencies — Experian, Equifax and TransUnion. Reviewing your file allows you to check for errors, confirm which events are still visible, and understand how a lender is likely to view your application.

How Lenders Assess Adverse Credit Cases

The UK mortgage market operates in tiers when it comes to credit requirements. High street banks such as HSBC, Barclays and Lloyds typically require a clean credit history for the past three to six years. Minor issues such as a single late payment may be overlooked, but defaults, CCJs or any insolvency marker will usually result in an automated decline.

Building societies sometimes take a more flexible approach, assessing applications manually rather than relying solely on credit scoring. This can make them a useful option for borrowers with minor or historical credit issues.

Specialist lenders — including names such as Pepper Money, Kensington Mortgages, Aldermore and Together — design their products specifically for borrowers with adverse credit. These lenders use manual underwriting to assess each case on its merits, considering factors that automated systems would overlook. Understanding mortgage lending criteria across different lender tiers is essential when you have adverse credit, because applying to the wrong lender wastes time and leaves a hard search on your file.

The key factors lenders weigh include the type and severity of the credit event, how long ago it occurred, whether the debt has been satisfied or remains outstanding, the size of deposit you can offer, and your current income and expenditure. A borrower with a satisfied CCJ from three years ago and a 25% deposit will have materially different options from someone with an unsatisfied CCJ registered within the past six months.

To discuss your adverse credit situation and find out which lenders may consider your application, call 01202 155992 or contact Mortgage One.

Types of Adverse Credit and How They Affect Your Options

Not all adverse credit carries the same weight. Lenders apply a tiered approach, with more recent and more serious events restricting your options more significantly.

Late and missed payments are the least severe form of adverse credit. Many mainstream lenders will overlook one or two late payments that are more than 12 months old. Specialist lenders may accept multiple recent late payments, particularly if your current financial position is stable.

Defaults remain on your credit file for six years. A satisfied default that is more than two years old is accepted by a reasonable range of specialist lenders. Unsatisfied defaults or those registered recently will narrow your options and typically require a larger deposit.

County Court Judgments (CCJs) are treated more seriously. A satisfied CCJ older than two years opens access to several specialist lenders. An unsatisfied CCJ within the last 12 months significantly limits availability and usually requires at least a 20–25% deposit.

IVAs, bankruptcy and debt relief orders are the most serious credit events. Most lenders require these to have been discharged for at least three years, and some require six years. Deposit requirements at this level are typically 25–35% or more, and interest rates will reflect the higher perceived risk.

If you have previously had a declined mortgage application because of adverse credit, it is important not to submit further applications without professional advice. Each declined application adds a hard search to your credit file, which can further reduce your score. Mortgage One can carry out a soft search to identify suitable lenders before making a formal application.

Deposit Requirements for Adverse Credit Mortgages

The deposit you need for a bad credit mortgage depends directly on the severity and recency of your credit issues. As a general guide, borrowers with minor historical issues such as a few late payments from several years ago may still access 90% or even 95% loan-to-value (LTV) products with some specialist lenders. However, more serious or recent adverse credit will typically require a deposit of 15–25%, and the most severe cases — such as recent bankruptcy or multiple unsatisfied CCJs — may need 25–35% or more.

A larger deposit does more than just meet the lender’s minimum requirement. It reduces the lender’s risk, which can improve the interest rate offered and widen the range of products available to you. If you are building towards a mortgage application after a credit setback, understanding how much mortgage deposit you may need and planning accordingly can make a significant difference to the terms you are offered.

Gifted deposits from family members are accepted by most lenders, provided the gift is genuinely non-repayable and the donor provides a signed declaration confirming this. A guarantor mortgage is another option worth exploring if a family member is willing to support your application.

Steps to Strengthen Your Application

There are several practical actions you can take to improve your chances of approval and potentially access more competitive terms.

•       Check your credit report for errors. Incorrect entries — such as debts marked as unsatisfied when they have been paid, or addresses you have never lived at — can drag your score down. Dispute any inaccuracies with the relevant credit reference agency.

•       Satisfy outstanding debts where possible. A satisfied CCJ or default is viewed significantly more favourably than an unsatisfied one. Even partial settlement can help in some cases.

•       Register on the electoral roll. This is one of the simplest ways to improve your credit profile, as it helps lenders verify your identity and address.

•       Reduce existing unsecured debt. High credit card balances and outstanding personal loans affect your affordability assessment. Paying these down before applying can increase the amount a lender is willing to offer.

•       Avoid new credit applications in the months before applying. Each application leaves a hard search on your file. Multiple searches in a short period can signal financial distress to lenders.

•       Build a track record of reliable payments. If you have time before you need to apply, consistent on-time payments on existing credit commitments demonstrate that your financial behaviour has improved. Working to improve your credit score over several months before applying can noticeably widen your lender options.

Adding a notice of correction to your credit file can also help. If your adverse credit was caused by a specific event — such as redundancy, illness or a relationship breakdown — a short written explanation gives lenders context that a score alone cannot provide.

First-Time Buyers and Remortgaging with Bad Credit

First-time buyers with adverse credit face the same lender assessments as any other applicant, but there are additional routes worth considering. Shared ownership mortgages allow you to purchase a percentage of a property and pay rent on the remainder, reducing the deposit and mortgage amount required. Joint borrower sole proprietor arrangements — where a family member joins the mortgage for affordability purposes but does not go on the property title — can also help.

If you are looking at a first-time buyer mortgage, Mortgage One can assess which government schemes and specialist products may suit your situation, taking into account both your income and your credit history.

Remortgaging with bad credit is also possible, and in some cases it is a positive step. If you took out a mortgage on a specialist rate two or three years ago and have maintained a clean payment record since then, you may now qualify for a more competitive deal. Even if your credit file still shows historical adverse events, lenders will note that you have demonstrated financial stability by keeping up with your mortgage payments. The key is to explore your remortgaging options before your current deal expires and you move onto a standard variable rate.

Interest Rates and the Longer-Term Strategy

Bad credit mortgages carry higher interest rates than standard products, reflecting the additional risk the lender takes on. The premium varies widely depending on the severity of your credit issues, the deposit size and the lender, but rates typically sit above what a borrower with a clean credit history would pay for an equivalent product.

However, a bad credit mortgage does not have to be a permanent arrangement. Many borrowers use it as a stepping stone: secure a mortgage now, maintain a clean payment record for two to three years, and then remortgage onto a mainstream product at a significantly lower rate. This approach works because each year that passes moves your adverse credit events further into the past, and consistent mortgage payments actively rebuild your credit profile.

With the Bank of England base rate currently at 3.75%, mortgage pricing across the market continues to be influenced by both the base rate and swap rates. Mortgage One monitors rate movements closely and can advise on timing your application to align with favourable market conditions.

For expert advice on securing a mortgage with adverse credit, call 01202 155992 or contact Mortgage One.

The information provided in this article is for general guidance only and does not constitute personal or regulated financial advice. If you’d like to understand what these moves could mean for you, speak to Mortgage One. We can explain your options and timings based on your specific circumstances.

Some Buy to Let mortgages are not regulated by the Financial Conduct Authority.

FAQs

1. Can I get a mortgage with a CCJ?

Yes, it is possible to get a mortgage with a CCJ on your credit file. Your options depend on when the CCJ was registered, whether it has been satisfied, the amount involved and the size of your deposit. Specialist lenders consider applications with CCJs, though terms will vary. A broker can identify which lenders are most likely to approve your case without unnecessary credit searches.

2. How long do I need to wait after bankruptcy before applying for a mortgage?

Most lenders require bankruptcy to have been discharged for at least three years, and some require six years. A small number of specialist lenders may consider applications sooner in certain circumstances, particularly if you can provide a large deposit and demonstrate financial stability since discharge.

3. Will a bad credit mortgage cost me more than a standard mortgage?

Generally, yes. Interest rates on adverse credit mortgages are higher than standard products because the lender is taking on additional risk. You may also need a larger deposit. However, rates and terms vary significantly between lenders, which is why working with a broker who can search the whole market is important.

4. Can I remortgage to a better rate after improving my credit?

Yes, and this is a common strategy. If you take out a bad credit mortgage and maintain all payments on time for two to three years, your credit profile will improve. At that point, you may qualify for a mainstream product at a significantly lower rate. It is worth reviewing your options before your initial deal period ends.

5. Does applying for a mortgage affect my credit score?

A full mortgage application creates a hard search on your credit file, which can temporarily reduce your score. Multiple hard searches in a short period can compound the effect. A broker can help by running a soft search first to identify suitable lenders, only proceeding to a full application when there is a realistic prospect of approval.

6. What deposit do I need for a bad credit mortgage?

Deposit requirements depend on the type and recency of your credit issues. Minor historical issues may allow a deposit as low as 5–10%, while more serious or recent adverse credit typically requires 15–25% or more. A larger deposit reduces the lender’s risk and can improve both your chances of approval and the rate offered.

7. Should I use a broker for a bad credit mortgage?

Using a whole-of-market broker is strongly advisable when you have adverse credit. A broker understands which lenders have criteria that match your specific situation, can present your application in the strongest light, and avoids the risk of unnecessary declined applications that could further damage your credit file.