How to Get a Mortgage with Bad Credit in the UK

Having bad credit does not automatically prevent you from getting a mortgage. The UK mortgage market has specialist lenders who work with borrowers who have had credit problems. However, you will typically face higher interest rates and stricter deposit requirements.

What Counts as “Bad Credit”?

Lenders assess credit issues on a spectrum of severity:

How Credit Issues Are Assessed

Lenders look at:

• **Date of the issue:** A CCJ from 5 years ago is viewed very differently from one last year
• **Satisfaction status:** Whether a default or CCJ has been repaid (satisfied) matters significantly
• **Amount:** A £300 default is very different from a £10,000 default
• **Number:** One missed payment is different from a pattern of financial difficulty
• **Cause:** Lenders sometimes consider the reason (e.g. medical emergency, redundancy)

Checking Your Credit File

Before applying for a mortgage, check your credit file with all three main agencies:

• **Experian** (experian.co.uk)
• **Equifax** (equifax.co.uk)
• **TransUnion** via Check My File (checkmyfile.com)

Look for errors, outdated information, and any issues you may have forgotten. You have the right to dispute incorrect entries.

High-Street vs Specialist Lenders

Most high-street banks (HSBC, Barclays, NatWest, Santander) have rigid credit criteria and will decline applicants with significant adverse credit.

Specialist lenders (sometimes called “adverse credit” or “sub-prime” lenders) such as Pepper Money, Kensington, Bluestone, and Together will consider applicants that high-street lenders decline. They charge higher rates to reflect the additional risk.

The rates are typically 1–3% higher than standard high-street products, but borrowers with improving credit can usually remortgage to better rates within 2–3 years as their credit file cleans up.

The Deposit Requirement

With bad credit, expect to need a larger deposit:

• Mild issues: 10–15% may still be possible
• Moderate issues (defaults, satisfied CCJs): 15–25% typically
• Severe issues: 25%+ or specialist lenders only

Improving Your Mortgage Chances

Steps to take before applying:

• **Register on the electoral roll** at your current address if you have not already
• **Close unused credit accounts** (too many open accounts can look risky)
• **Do not apply for new credit** in the 3–6 months before your mortgage application
• **Satisfy outstanding debts** — satisfy (repay) any defaults or CCJs if possible; this improves your credit profile
• **Build payment history** — consistent, on-time payments over 12+ months demonstrates improved financial management
• **Save a larger deposit** — more equity means lower lender risk

Using a Specialist Broker

For borrowers with adverse credit, using a whole-of-market specialist broker is strongly recommended over applying direct. Specialist brokers:

• Know which lenders will consider specific credit profiles
• Can present your application in the most favourable context
• Avoid unnecessary hard credit searches (each declined application damages your score further)
• Have access to specialist lender panels not available to consumers directly