If you have bad credit, it is easy to assume that getting a mortgage is out of reach. The good news is that it’s often far more possible than people think. Many clients come to me after being told no by their bank, only to discover that there are lenders who will look at their situation in a much more flexible way, and say yes!
Every lender treats bad credit differently. Some are strict and reject anything that looks imperfect. Others are comfortable with older issues, small blips or problems that have now been resolved. My job is to work out which lenders match your circumstances, and guide you through the process without judgement or stress.
I deal with bad credit mortgage cases all the time, so whether you have missed some payments, have a CCJ or a low credit score, you are not alone. This guide explains what counts as bad credit, how lenders view it, and how you can improve your chances of being approved.
What Counts as Bad Credit?
‘Bad credit’ is simply a sign that something on your credit file has caused concern for a lender. It does not mean you cannot get a mortgage.
Here are the most common things lenders look at:
Missed or late payments on loans or credit cards
Defaults (Unsettled and Settled)
County Court Judgements (CCJs)
IVAs or debt management plans
Mortgage arrears
A low credit score
Payday loans
Many people have one or more of these without realising how long they stay on a report. The aim here is not to judge, but to help you recognise your own situation so you know what options might be available.
Can You Still Get a Mortgage With Bad Credit?
To put it simply..Yes, it’s possible, but remember: every case is different.
Getting a mortgage with bad credit is absolutely possible. High street banks tend to be strict, which is why many people receive a rejection, even if their situation would be perfectly acceptable to a different lender.
Specialist lenders take a very different approach. They actively deal with customers who have CCJs, defaults, missed payments or other bumps on their credit file. This is their bread and butter, and you are precisely the type of customer they are set up for. Rather than focusing purely on a credit score, they look at the full story behind the issues, when they happened and how stable things are now.
Because of this, specialist lenders can be much more flexible. Many are happy with older problems, minor blips or situations that have since been resolved. Some will even consider recent issues if the rest of your application is strong.
Every case is different, so it is always worth checking your options first, rather than assuming the answer is a definite no.
What Lenders Look At
Lenders use a combination of factors to decide whether they can offer you a mortgage:
Your income and overall affordability
The size of your deposit
Stability of your employment or self-employment
How long ago the credit issues happened
Whether the debts have been repaid or settled
The loan-to-value (LTV) that you are applying for… the lower the better!
Even with bad credit, a substantial deposit and steady income, plus older issues, will always work in your favour.
How to Improve Your Chances of Approval
Save a Bigger Deposit
This will be one of the most significant advantages you can have.
A larger deposit makes a huge difference. It lowers the lender’s risk and can open the door to more competitive mortgage products. Even an extra few thousand pounds can shift your application from a ‘no’ to a ‘yes’.
If saving feels daunting, try setting small monthly goals or using budgeting tools. Many of my clients find that even simple changes help the deposit grow quicker than expected.
A larger deposit also reduces your monthly repayments, which helps in the long term.
Register on the Electoral Roll
This will be one of the most significant advantages you can have.
A larger deposit makes a huge difference. It lowers the lender’s risk and can open the door to more competitive mortgage products. Even an extra few thousand pounds can shift your application from a ‘no’ to a ‘yes’.
If saving feels daunting, try setting small monthly goals or using budgeting tools. Many of my clients find that even simple changes help the deposit grow quicker than expected.
A larger deposit also reduces your monthly repayments, which helps in the long term.
Reduce Debts Where Possible
Paying down credit cards or small loans shows lenders that you manage your commitments responsibly. You do not need to clear everything, but reducing balances helps your affordability and can quickly raise your credit score.
Focus on one or two debts at a time rather than trying to tackle everything at once.
Check and Fix Errors on Your Credit Report
Mistakes on credit reports are more common than most people realise. A wrongly recorded missed payment or an account showing the wrong balance can affect your application.
Check your report with all three agencies and raise disputes for anything that looks incorrect. Lenders appreciate accuracy, and fixing errors can improve your chances straight away.
Avoid Payday Loans or New Credit Applications
Payday loans are a red flag for many lenders. If you have used one recently, it can limit your options for a while. If you can avoid taking new credit in the months before you apply, it can really help.
New credit applications can temporarily reduce your score, so hold off unless the credit is essential.
Work With a Bad-Credit Mortgage Broker
A broker experienced in bad credit cases can save you time and worry. You get guidance on which lenders are suitable, which ones to avoid, and what information you need to prepare.
This also protects you from unnecessary credit checks, which helps keep your score stable while you apply.
What About Remortgaging With Bad Credit?
Many people worry they are stuck with their current lender once their credit becomes damaged. This is not always the case.
Remortgaging with bad credit is often possible. Some lenders are perfectly comfortable with older issues, especially if your affordability is strong. For others, you may be able to stay with your existing lender through a simple product transfer, which typically does not require a full credit check.
Even if you were declined a year or two ago, it is still worth checking again. The criteria may have changed, and your situation may have improved.
Bad Credit But Self-Employed?
Self-employed applicants sometimes feel they face two challenges rather than one, but lenders are more flexible than before. Many are happy to assess:
SA302s and tax year overviews
Full company accounts
Contractor day rates
Multi-year income averages or the latest year's figures
So being self-employed with bad credit does not mean you cannot get a mortgage. It means the case needs to be placed with the right lender, who understands your business structure.
Real Examples of When Bad Credit Mortgages Are Approved
Here are the kinds of situations that lenders accept more often than people expect:
Missed credit card payments at least two or three years ago
A small CCJ that has now been paid in full, especially utility or telecoms (mobile phones) and parking tickets
Old defaults from when someone changed jobs, separated, or moved home.
A debt management plan that has now been completed, ideally 12-24 months ago.
Mortgage arrears from a few years ago, with clean conduct since then.
These scenarios are more common. As long as the lender understands the context, they are often willing to help.
How a Mortgage Broker Like Me Helps
Working with a broker can make the process much smoother. Here is how:
Access to lenders who accept different types of bad credit
Protection from repeated credit checks
Honest guidance on what is realistic
Advice on improving your score before applying
Help finding the best deal based on your income, deposit and circumstance
If you are unsure where you stand, a simple chat can give you clarity and a clear plan forward.
Next Steps
If you would like to talk through your situation, I am always happy to offer a relaxed, no-obligation chat. My name is Ian Smith, and I am a whole-of-market mortgage broker based in Essex. Before you assume something is not possible, it is always worth checking what the market can actually offer.
You might have far more options than you realise.
