Ben Smith
Having bad credit can make getting a mortgage more challenging, but it doesn’t necessarily mean your application will be declined. Lenders assess credit history differently, and the options available will depend on the type of credit issue, how recently it occurred and your wider financial circumstances.
Missed payments, defaults, County Court Judgments (CCJs), debt management plans and previous bankruptcy can all affect how lenders assess an application. Some lenders have stricter criteria than others, while specialist mortgage providers may consider circumstances that mainstream lenders are less likely to accept.
Your deposit, income, existing debts and affordability will also play an important role. OnTheLadder connects people looking for mortgage help with mortgage advisers who can discuss their circumstances and explore potential options.
Not all credit problems are treated equally by mortgage lenders. The impact on your application will depend on the type of issue, its severity, how long ago it happened and whether your finances have improved since.
Missed credit card or loan payments may affect your options, particularly if they were recent or repeated. Defaults and CCJs can have a greater impact, while more serious events such as an Individual Voluntary Arrangement (IVA) or bankruptcy may limit the number of lenders willing to consider your application.
Some lenders may also consider applicants who have previously used a debt management plan or experienced other financial difficulties. However, eligibility criteria vary, and some issues may require a longer period of financial recovery before an application is viable.
Your credit history is only one part of the picture. A stable income, manageable outgoings and a suitable deposit may help support an application, depending on the lender’s requirements.
If you’re unsure how your credit history could affect your chances, a mortgage adviser can help you understand your circumstances and explore the options that may be available.
1. Submit an enquiry: Tell us a little about your mortgage plans and circumstances.
2. Share your situation: Explain the type of credit issues you’ve experienced and, where possible, when they occurred.
3. Get connected with an adviser: Your enquiry is passed to a mortgage adviser who can discuss your circumstances.
4. Explore potential options: Understand which lenders may consider your application and what requirements you may need to meet.
5. Decide your next steps: Consider your options before deciding whether to proceed with a mortgage application.
It may be possible to get a mortgage after a default or County Court Judgment, but the details matter. Lenders may consider when the issue occurred, the amount involved, whether it has been settled and your credit history since.
A recent unpaid default may restrict your options more than an older, settled default. Similarly, a CCJ’s age, value and payment status can influence whether a lender is willing to consider an application.
Some specialist lenders assess applicants with adverse credit, although their eligibility requirements, interest rates and deposit expectations can differ from standard mortgage products. A larger deposit may help in some circumstances, but it won’t guarantee acceptance.
If you’ve had a default or CCJ, it’s worth understanding your position before making multiple applications. A mortgage adviser can help you explore potential lenders and explain what may be realistic for your circumstances.
If your credit history has affected your mortgage options, taking time to understand your current financial position may help you prepare for an application.
Checking your credit reports can help you identify inaccuracies and understand how lenders may view your history. Keeping up with existing payments, reducing outstanding debts where possible and avoiding unnecessary new credit applications may also help strengthen your financial position over time.
The amount of time since a credit issue occurred can be important, so waiting may improve your options in some circumstances. However, whether this is necessary will depend on the type of issue and the criteria of individual lenders.
A mortgage adviser can help you understand how your credit history may affect your application, whether any lenders could consider your circumstances now and what steps might be worth taking before applying.
OnTheLadder helps connect you with a mortgage adviser so you can discuss your situation and explore your next steps.
Bad credit doesn’t necessarily mean your plans to buy a home or remortgage have to stop. The options available will depend on your credit history and financial circumstances, but understanding where you stand is a useful first step.
Submit an enquiry through OnTheLadder to connect with a mortgage adviser who can discuss your situation and help you explore potential options.
