What counts as bad credit for mortgage purposes?
Bad credit is a broad term that covers any negative marks on your credit file. Lenders look at the type of issue, how much was involved, when it happened, and whether it’s been resolved. Even small issues like a missed phone bill payment can show up. Read the full bad credit mortgage guide for a deeper look at how UK lenders weigh each issue.
Missed or late payments
- One or two missed payments are relatively common and some lenders will overlook them
- A pattern of missed payments is more serious and limits your options
- Stay on your credit file for six years from the date of the missed payment
Defaults
- Issued when you’ve repeatedly failed to make payments and the creditor closes the account
- Stay on your credit file for six years from the date of default
- Satisfied defaults (paid off) are viewed more favourably than unsatisfied ones
County Court Judgments (CCJs)
- A court order to repay a debt — more serious than a default
- Remain on your credit file for six years
- If paid within one month, can be removed from the register entirely
- Satisfied CCJs are viewed better, especially if older than 2–3 years
Individual Voluntary Arrangements (IVAs)
- A formal agreement with creditors to repay debts over a fixed period
- Stay on your credit file for six years from the start date
- Some specialist lenders will consider you once the IVA is completed
Bankruptcy
- The most serious form of credit issue for mortgage purposes
- Discharged after one year but stays on your credit file for six years
- Very few lenders will consider you during an active bankruptcy
- Options improve significantly once discharged and with time
Debt Management Plans (DMPs)
- An informal arrangement to repay debts at a reduced rate
- Not recorded on your credit file directly, but the reduced payments may show
- Lenders may ask about DMPs on the application form
How long do credit issues stay on your file?
Most negative marks remain visible to lenders for six years. After that, they drop off your credit report entirely. The older the issue, the less weight lenders give it.
Lenders treat a three-year-old satisfied CCJ very differently from a six-month-old unsatisfied one. Time, settlement, and evidence that you’ve managed credit well since the issue all work in your favour.
Check what’s on your credit file
- CheckMyFileAll 3 agencies
See your data from all three UK agencies in one report. The best way to know exactly what mortgage lenders will see.
- ExperianFree
Free Experian credit score and report. Many mortgage lenders use Experian, so this is essential to check.
- EquifaxFree
Free access via ClearScore. Check for errors that may not appear on the other agencies.
How much deposit do you need with bad credit?
Generally, you’ll need a larger deposit than someone with a clean credit history. A bigger deposit reduces the lender’s risk and opens up more options.
A larger deposit also helps you access better interest rates. On a £200,000 property, the difference between a 15% and 25% deposit could save you thousands over the mortgage term — see exactly how the bands work with the LTV calculator.
What interest rates can you expect with bad credit?
Rates for bad credit mortgages are higher than standard products because the lender is taking on more risk. How much higher depends on the severity of your credit issues and your deposit size — try the repayment calculator to see what the difference looks like in monthly payments.
Expect to pay 1–4% above the rates advertised to borrowers with clean credit. For example, if a mainstream 5-year fix is 4%, a bad credit equivalent might be 5–8% depending on your circumstances.
The good news is that rates improve over time. Many borrowers take a bad credit mortgage initially and then remortgage to a cheaper deal after two or three years, once their credit file has improved.
How can a broker help with a bad credit mortgage?
A mortgage broker is particularly valuable when you have credit issues. Here’s why.
Protect your credit score
- Every rejected application leaves a hard search on your file
- Multiple rejections in a short period make things worse
- A broker only submits to lenders likely to say yes
Access specialist lenders
- Many adverse-credit lenders only deal through brokers
- They don’t appear on comparison websites
- A broker knows each lender’s specific criteria and tolerances
Present your case properly
- Brokers can write supporting notes explaining your circumstances
- Context matters — medical issues, redundancy, or divorce can be explained
- A well-presented application is more likely to succeed
How to apply for a mortgage with bad credit
Applying with bad credit follows the same basic steps as a standard mortgage, with a few extra precautions.
- 01
Check your credit reports
Get your reports from Experian, Equifax, and TransUnion. Check for errors — incorrect addresses, accounts that aren’t yours, or debts marked as unsatisfied when you’ve paid them. Dispute anything inaccurate.
- 02
Understand your position
Make a note of every negative mark: what it is, the amount, the date, and whether it’s satisfied. This gives your broker the full picture to work with.
- 03
Speak to a specialist broker
A broker who works with adverse-credit lenders will tell you which products you’re likely to qualify for, what deposit you’ll need, and what rates to expect.
- 04
Gather your documentation
Income proof, bank statements, deposit evidence, and ID. If your credit issues were caused by specific circumstances (illness, redundancy), prepare a brief written explanation.
- 05
Apply through your broker
Your broker will package the application and submit it to the lender most likely to approve you. They’ll handle any queries and keep you updated throughout.
- 06
Consider your next move
Once you’re on the ladder, focus on maintaining a clean payment record. After two to three years you may be able to remortgage to a much better rate.
Speak to a bad credit mortgage specialist
At Clearview Mortgage Solutions, we work with specialist lenders who consider all types of credit issues — including self-employed applicants with adverse credit or those who have been refused a mortgage elsewhere. We’ll review your credit file, explain your realistic options, and only apply to lenders where you have a genuine chance of being accepted.
Compare deals across the market or contact us for a free, no-obligation assessment. We’ll be honest about what’s possible and help you take the right next step.
I thought a CCJ from three years ago meant I’d never get a mortgage. My broker found a specialist lender and I completed on my first home within eight weeks.
At Clearview Mortgage Solutions, we work with specialist lenders who consider all types of credit issues. We’ll review your credit file, explain your realistic options, and only apply to lenders where you have a genuine chance of being accepted — no obligation.