Can You Get a Mortgage with Bad Credit in the UK: Your Guide For 2025

Are you worried that a poor credit history might stop you from getting a mortgage in the UK? Whether you’ve had missed payments, defaults, or even bankruptcy, it doesn’t automatically rule you out. In this 2025 guide, we’ll walk you through the options available, explain how lenders view bad credit, and share practical steps to improve your chances of approval. 

So, without further ado, let’s read our article and discover how you can still achieve homeownership despite past financial challenges. 

What Is Meant By Bad Credit In The UK?

When people talk about bad credit in the UK, they mean a history of financial problems recorded on your credit file. These problems suggest to lenders that you may be a higher risk when borrowing money. Bad credit doesn’t mean you will never get a mortgage, but it can limit your options and make borrowing more expensive.

What Counts as Bad Credit?

A range of financial issues can contribute to a poor credit history, including:

• Missed or late payments on credit cards, loans, or utility bills.
• Defaults – when you repeatedly miss payments and the account is closed by the lender. 
• County Court Judgments (CCJs) – a legal order to repay debt.
• Individual Voluntary Arrangements (IVAs) – a formal agreement to repay part of your debts.
• Bankruptcy – when you are legally declared unable to pay debts.
• Debt Relief Orders (DROs) – available to people with low income and little spare money.
• High levels of debt compared to your income, even without missed payments.

Any of these can stay on your credit record for several years, usually up to six, and will affect how lenders view your mortgage application.

How Credit Scores and Reports Work in the UK

Your credit history is summarised in a credit report, which records your borrowing and repayment behaviour. From this, a credit score is calculated. This score gives lenders an idea of how likely you are to repay borrowed money.

Key facts to keep in mind:

• Credit scores vary depending on the credit reference agency, so your score may not be the same everywhere. 
• Lenders do not just rely on your score. They also look at your income, outgoings, and overall financial stability. 
• Even a low score does not automatically mean rejection, but it reduces the number of lenders willing to accept you. 

What’s The Role of Credit Reference Agencies?

In the UK, three main credit reference agencies hold your credit information:

• Experian 
• Equifax 
• TransUnion 

Each agency collects slightly different data, but all track your payment history, debts, and any public records like CCJs or bankruptcy. When you apply for a mortgage, the lender usually checks with at least one of these agencies to help decide if you are a safe borrower. 

What Is Meant By Bad Credit or Adverse Credit Mortgages?

A bad credit mortgage, also called an adverse credit mortgage, is a type of home loan designed for people who have problems in their credit history. These mortgages work in a similar way to standard mortgages, but they are tailored for borrowers who may struggle to get approval from high street banks due to their past financial record.

How They Differ from Standard Mortgages

• Higher interest rates – because lenders see you as higher risk.  
• Larger deposits required – often 15% to 25% of the property value, compared with 5% or 10% for those with good credit. 
• Stricter checks – lenders may ask for more evidence of your income, affordability, and financial stability. 

Who They Are For

Adverse credit mortgages are typically aimed at people with:

• Missed or late payments. 
• Defaults or CCJs. 
• IVAs or Debt Management Plans. 
• Bankruptcy in their past. 
• A history of heavy borrowing compared to their income 

Why Lenders Offer Them

While mainstream lenders often reject applicants with poor credit, specialist lenders provide these mortgages because: 

• There is demand from people who still want to buy homes despite past financial issues. 
• Lenders balance their risk by charging higher rates and asking for bigger deposits. 
• Over time, borrowers who keep up with repayments may rebuild their credit and later switch to a standard mortgage with better terms. 

Pros and Cons of Adverse Credit Mortgages

Pros:

• Makes homeownership possible even with a poor credit history.
• Can help rebuild credit if repayments are made on time.
• Some lenders take a more personal, case-by-case approach.

Cons:

• Higher monthly payments due to increased interest rates.
• Larger deposit required, which can be difficult to save.
• Fewer lenders available, so less choice.
• Stricter checks and more paperwork during the application 

Can You Get a Mortgage with Bad Credit in the UK?

Yes, it is possible to get a mortgage in the UK even if you have bad credit. While having a poor credit history can make things more difficult, it does not automatically mean you will be turned down. Specialist lenders exist to provide options for people who might not meet the strict requirements of mainstream banks.

What Lenders Look At Beyond Your Credit Score

When assessing your application, lenders don’t just focus on your credit history. 

They also consider:

• Income – your salary, self-employment earnings, or any other regular income. 
• Outgoings – monthly bills, loans, and other financial commitments. 
• Affordability – whether you can realistically afford the mortgage repayments based on your income and expenses. 
• Employment stability – a steady job or consistent income is viewed more positively. 
• Deposit size – a larger deposit can help reduce the lender’s risk. 

The Importance of Severity and Recency of Bad Credit

The impact of bad credit on your mortgage chances depends on how serious and how recent the issues are:

• Minor issues (such as the occasional missed payment) are usually less of a problem, especially if they happened a long time ago. 
• More serious problems (like defaults, CCJs, IVAs, or bankruptcy) can have a bigger effect, but lenders may still consider you after a certain time has passed. 
• Recent issues are viewed more negatively than older ones. For example, a default from five years ago will usually carry less weight than one from last year. 

The more time that has passed since your financial difficulties, and the more you can show that your current finances are stable, the better your chances of being approved for a mortgage.

How Bad Credit Affects Your Mortgage Options

Lenders use your credit history and credit score to understand how reliable you are when it comes to borrowing and repaying money. A strong record makes you less risky in their eyes, while a poor record raises concerns about whether you will keep up with future repayments.

Why Lenders Care About Credit History

• It shows how you have handled borrowing in the past. 
• It gives lenders confidence that you will repay on time. 
• It helps them decide what type of deal, interest rate, and deposit requirement to offer you. 

How Bad Credit Can Limit Your Options

If your credit file shows mistakes or serious issues, you are seen as higher risk. 

This can lead to:

• Fewer lenders willing to offer you a mortgage. 
• Higher interest rates compared to someone with good credit. 
• Larger deposit requirements to reduce the lender’s risk. 
• Stricter checks on your income and affordability. 

Common Credit Problems That Hurt Your Chances

• Missed or late payments – even small ones can raise red flags. 
• County Court Judgments (CCJs) – evidence of unpaid debts that went to court. 
• Defaults – missed payments that turned into unfulfilled agreements. 
• Insolvency records – such as IVAs (Individual Voluntary Arrangements) or bankruptcy, which show severe financial struggles. 

Is There a Minimum Credit Score Requirement?

The short answer is no. There is no fixed score that guarantees approval or rejection. Each lender has its own criteria, and they consider your overall financial situation, not just your credit score.

Why the Myth Exists

Many people believe that a certain credit score is required because lenders often have internal scoring systems. While a higher score can make approval easier, it is not the only factor in the decision.

What Lenders Really Look At

Besides your credit score, lenders examine:

• Income – the amount and stability of your earnings. 
• Deposit size – a larger deposit can reduce the lender’s risk. 
• Employment status – steady employment or reliable self-employment history improves your chances. 
• Affordability – your monthly outgoings and ability to make repayments. 

Even if your credit score is low, you can still get a mortgage if you demonstrate stable finances, a reasonable deposit, and the ability to meet monthly repayments. Lenders look at the bigger picture rather than relying on a single number. 

How Bad Credit Changes What You Can Borrow

When you have bad credit, lenders often adjust the terms of a mortgage to reduce their risk. This can affect how much you can borrow and the deposit you need to provide.

Lower Loan-to-Value (LTV) Ratios

The loan-to-value (LTV) ratio is the percentage of the property’s value a lender is willing to finance:

• Standard mortgages for people with good credit may allow up to 95% LTV, meaning you only need a 5% deposit. 
• With bad credit, lenders usually offer lower LTVs, often around 85%, so a 15% deposit or higher is required. 

Larger Deposits

The size of your deposit is often linked to the severity and recency of your credit issues:

• Deposits for bad credit mortgages typically range from 10% to 25% of the property value. 
• A larger deposit reduces the lender’s risk and may also improve the interest rate offered. 

Bad credit does not prevent you from borrowing, but it may limit the amount you can borrow and require a higher upfront deposit. Planning ahead and saving for a larger deposit can make approval easier. 

Types of Mortgages Available for People with Bad Credit

If you have bad credit, there are several mortgage options available. The type of mortgage you qualify for depends on your financial situation, the severity of your credit problems, and how much deposit you can provide.

1. Standard or Mainstream Mortgages

• Some high street lenders may still consider applicants with minor or older credit issues. 
• Approval is more likely if you have a stable income, a reasonable deposit, and the credit issues are not recent. 
• These mortgages usually have lower interest rates compared to specialist products. 

2. Specialist or Adverse Credit Mortgages

• Designed specifically for borrowers with poor credit, including defaults, CCJs, IVAs, or bankruptcy in the past. 
• Lenders assess applications on a case-by-case basis rather than relying solely on automated checks. 
• Typically come with higher interest rates and larger deposit requirements (often 15–25%). 

3. Guarantor Mortgages

• A family member or friend guarantees the mortgage, reducing the lender’s risk. 
• The guarantor is responsible if you fail to make payments, so it carries risk for them. 
• Can help borrowers who are otherwise unable to meet lender requirements. 

4. Joint Mortgages

• Applying with a partner who has good credit can balance your application. 
• The lender considers both applicants’ incomes and credit histories. 
• This option may improve the chance of approval and possibly secure better terms. 

5. Buy-to-Let Mortgages (with Bad Credit)

• Some specialist lenders offer buy-to-let mortgages even with credit issues. 
• Typically aimed at property investors rather than first-time homeowners.  
• Higher deposits and stricter checks usually apply. 

Additional Options

• Near-Prime Mortgages: For people with imperfect credit that isn’t extremely poor. Lenders offer more flexible terms than adverse credit mortgages but stricter than mainstream ones. 
• New Schemes (Government-backed): For example, the Mortgage Guarantee Scheme (2025) allows certain borrowers with smaller deposits to access mortgages with support from government schemes. These schemes may help people who struggle to get approval under normal conditions.

Even with bad credit, there are options available. Choosing the right type of mortgage depends on your financial situation, the help you may have from family, and how much deposit you can provide. Specialist lenders or guarantor arrangements are often the most practical routes for borrowers with poor credit. 

Who Can Lend to People with Bad Credit

Even with a poor credit history, there are lenders willing to provide mortgages. The type of lender you approach can make a big difference in your chances of approval.

1. Mainstream Lenders

• High street banks and building societies may still consider applicants with minor or older credit issues. 
• Usually suitable if your credit problems are small, infrequent, or happened a long time ago. 
• Often offer lower interest rates than specialist lenders. 
• Applications are usually processed automatically, so borderline cases may be rejected without human review. 

2. Specialist or Niche Lenders

• Focus specifically on borrowers with adverse credit histories. 
• More flexible in their assessment, often reviewing each application case by case rather than relying solely on credit scores. 
• Typically charge higher interest rates and fees to compensate for the increased risk.  
• Can accept applicants with defaults, CCJs, IVAs, or even past bankruptcy. 
• Human underwriters manually review applications, which can improve approval chances compared to automated systems. 

3. Other Lender Options

• Buy-to-let lenders: Some specialist lenders offer mortgages for property investors even with bad credit. 
• Government-backed schemes: Certain schemes may allow borrowers with small deposits or imperfect credit to access mortgages with support.  

Your choice of lender depends on your credit history, the size of your deposit, and your current financial situation. Specialist lenders and human-reviewed applications often provide the best route for borrowers with more serious credit issues, while mainstream lenders may consider cases with minor or older problems. 

How to Improve Your Chances of Getting a Mortgage with Bad Credit

Even with a poor credit history, there are steps you can take to improve your chances of mortgage approval. Lenders look for evidence that you are financially responsible and capable of making regular repayments.

Here are 9 actions you could take to improve your chance of getting a mortgage with bad credit:

1. Check and Fix Your Credit Reports: Obtain your credit report from Experian, Equifax, and TransUnion. Look for errors, such as incorrect missed payments or outdated defaults, and have them corrected. Then, Ensure all settled debts are accurately recorded. 
2. Build or Improve Your Credit Score: Pay all bills and existing debts on time. In the meantime, avoid taking on new credit unnecessarily, as multiple applications can lower your score. Plus, register on the electoral roll, which helps lenders verify your identity and address. 
3. Save for a Larger Deposit: Lenders are more likely to approve applications with bigger deposits. For bad credit mortgages, a deposit of 20% or more can improve approval chances and potentially reduce interest rates. 
4. Consider Smaller or Cheaper Properties: Applying for a smaller or less expensive property reduces the amount you need to borrow. Lower loan amounts make lenders more confident in approving your application. 
5. Be Honest and Provide Explanations: Include a clear explanation of past credit issues in your application. Lenders appreciate transparency, especially if your financial situation has improved since your credit problems.
6. Seek Help from Family or Friends: A family member or friend guarantees your mortgage. Or a family member can contribute to your deposit, lowering your LTV. 
7. Use a Specialist Mortgage Broker (FCA-regulated): Brokers familiar with bad credit markets can match you with lenders willing to consider your situation. They can save time and help you find the best deal among specialist options. 
8. Reduce Existing Debts and Show Stable Finances: Pay down outstanding debts to reduce your monthly outgoings. Demonstrating stable employment or consistent income improves affordability in the lender’s eyes. 
9. Be Patient with Reapplications: If your application is declined, wait before reapplying. Multiple failed applications in a short time can further damage your credit score. 

Improving your chances of getting a mortgage with bad credit is about preparation and patience. Correcting your credit record, saving a larger deposit, reducing debt, and using specialist brokers can significantly increase the likelihood of approval. 

What to Expect When Applying for a Mortgage with Bad Credit

Applying for a mortgage with a poor credit history can feel overwhelming, but knowing what to expect helps you prepare in advance. Lenders assess risk carefully, and while approval is still possible, the process may differ compared to standard mortgages.

1. Stricter Eligibility Checks 

• Lenders will review your credit history in detail, looking for past defaults, CCJs (County Court Judgments), missed payments, or bankruptcies. 
• They may also look at how recent the credit issues are, older issues carry less weight than recent ones. 

2. Higher Deposit Requirements

• Most lenders will ask for a larger deposit than standard mortgages. 
• Expect to provide at least 15–25% of the property’s value, depending on the severity of your credit history. 

3. Higher Interest Rates

Because of the perceived higher risk, lenders usually charge higher interest rates on bad credit mortgages. Over time, if you manage repayments well, you may be able to remortgage at better rates. 

4. Limited Lender Options

Not all banks or high street lenders offer bad credit mortgages. You may need to apply through specialist lenders or work with a broker who has access to niche products. 

5. Longer Approval Process

Applications can take longer to process, as lenders may ask for additional documents and explanations. So, be prepared to provide details about your income, employment history, debt repayments, and spending habits. 

6. More Supporting Documentation

Commonly requested documents include: 

• Payslips and proof of employment. 
• Bank statements (typically 3–6 months). 
• Proof of address and identity. 
• Evidence of cleared debts or repayment arrangements. 

7. Possible Restrictions on Borrowing

Some lenders may limit the amount you can borrow compared to your income. Others may set conditions, such as requiring a guarantor or restricting certain types of properties. 

8. The Role of a Mortgage Broker

A broker (should be FCA-regulated) experienced in bad credit cases can improve your chances of approval by matching you with suitable lenders. They can also help you navigate stricter requirements and negotiate better terms.

When applying for a mortgage with bad credit, expect higher deposits, stricter checks, and higher interest rates. However, with the right preparation and support, getting approved is still achievable. 

When Might It Be Harder or Impossible?

Getting a mortgage with bad credit is not always impossible, but there are certain situations where approval becomes very unlikely:

• Recent or Serious Credit Issues – If you’ve had a bankruptcy, repossession, or IVA within the last couple of years, most lenders will decline. 
• No Deposit or Very Low Savings – Bad credit mortgages usually require at least a 15–30% deposit. Without this, options are very limited. 
• Unstable Income or Too Much Debt – If your income is irregular, or your debts are already too high compared to your earnings, lenders may reject your application. 

In these cases, your best option may be to spend time improving your credit score and building savings before applying again. 

Tips for Managing Your Finances After Getting a Mortgage and Moving Forward 

Securing a mortgage with bad credit is an achievement in itself, but the real work begins once you start making repayments. By managing your finances wisely, you can rebuild your credit profile and put yourself in a stronger position for the future.

1. Keep Up with All Payments on Time: Your mortgage repayment history has a major impact on your credit rating. Consistently paying on time not only protects your home from repossession but also helps you rebuild credit, opening the door to better deals in the future.
2. Monitor Your Credit Reports Regularly: Check your credit reports with agencies such as Experian, Equifax, or TransUnion to track your progress. Monitoring your file allows you to spot errors, ensure debts are recorded correctly, and see how your score improves over time.
3. Avoid Taking On More Debt: Resist the temptation to take on new credit commitments, especially large loans or credit cards, before you’ve established a solid mortgage payment record. Too much debt can hurt your affordability profile and may prevent you from securing better mortgage rates later.
4. Budget Carefully for Mortgage Repayments: Create a realistic monthly budget that prioritises your mortgage repayment above discretionary spending. Building a financial buffer or emergency fund will give you more stability and reduce the risk of missed payments.
5. Consider Remortgaging in the Future: After a few years of consistent repayments and improved credit, you may become eligible for mainstream or lower-rate mortgage products. Switching to a better deal can reduce your monthly repayments and save you money in the long run.

Furthermore, treat your first mortgage as a stepping stone. With disciplined money management and consistent repayments, you’ll not only protect your home but also improve your financial future, making it easier to qualify for more competitive products later.

What Should I Do If My Debts Are Huge And I Cannot Afford To Settle Them?

Sometimes, it may be difficult to agree on a payment plan with your creditor or debt collection agency, particularly if the payments are financially overwhelming.

In such cases, you might want to explore potential debt solutions in the UK. There are several options available in the UK, each with its own eligibility criteria. Choosing the right option can help resolve your debt issues, but the wrong one may make your financial situation worse.

However, it is essential to seek professional advice before committing to any debt solution. A debt advisor can help you assess your situation and guide you in selecting the most appropriate option.

Some of The Key Debt Solutions Available in England, Northern Ireland, and Wales:

• Debt Management Plan (DMP): An informal arrangement where you make monthly payments toward your debts. There is no legal commitment, but your creditors may agree to reduce interest or freeze fees.
• Individual Voluntary Arrangement (IVA): A formal agreement where you make regular payments to creditors over 5 or 6 years. The remaining debt may be written off, but this solution has strict criteria.
• Debt Relief Order (DRO): Designed for individuals in severe financial distress, this option freezes interest and allows a year of no payments, potentially leading to debt resolution.
• Bankruptcy:  A formal legal process that can clear most debts if you are unable to repay them. Bankruptcy provides a financial reset, but it also has serious long-term consequences, including restrictions on your financial affairs and potential asset loss. 

Debt Solutions Available in Scotland

1. Protected Trust Deed: A formal agreement to repay part of what you owe over four years. The remaining debt may be written off afterward. It is legally binding and affects your credit rating. 
2. Debt Arrangement Scheme (DAS): A government-backed scheme allowing you to repay your debts through a Debt Payment Programme (DPP) based on what you can afford. Interest and charges could be frozen, and creditors can’t take legal action. 
3. Sequestration (Scottish Bankruptcy): A formal insolvency process where most debts may be written off, but assets may be sold to repay creditors. It offers a fresh start but comes with serious consequences. 
4. Minimal Asset Process (MAP): A simplified form of bankruptcy designed for individuals with low income and few assets. It allows eligible debts to be written off after six months, provided the individual fully cooperates with the process. However, in practice, the process may take longer depending on the complexity of the case. MAP also offers lower fees and reduced administrative burden compared to full bankruptcy.

Caution: These debt solutions have both advantages and drawbacks, so it’s important to carefully weigh your options before making a decision.

If you’re unsure which debt solution choose, feel free to reach out to us for guidance on the best option based on your situation:

Get Professional Advice

If you are unsure which debt solution suits your situation, speak to a professional debt advisor. Free, independent advice services like MoneyHelper can help you assess your finances and find the best option for you.

Final Thoughts

Getting a mortgage with bad credit in the UK is challenging, but it is not impossible. While your options may be limited, and you may face higher interest rates, stricter checks, and larger deposit requirements, specialist lenders and tailored mortgage products can make homeownership achievable. 

Keep in mind that the severity and recency of your credit issues play a big role, but stable income, responsible financial behaviour, and preparation can significantly improve your chances of success.

For many, a bad credit mortgage can act as a stepping stone, helping you rebuild your financial profile and eventually move toward more favourable mortgage deals. At the same time, if your debts feel overwhelming, exploring debt solutions and seeking professional advice may be the best first step before applying.

Ultimately, the key lies in patience, discipline, and careful planning. By managing repayments responsibly, reducing debt, and steadily improving your credit history, you can strengthen your financial future and open the door to better opportunities in the housing market. 

Key Takeaways

• Bad credit in the UK refers to a history of financial issues such as missed payments, defaults, CCJs, IVAs, or bankruptcy recorded on your credit file. 
• Credit scores vary across agencies, but lenders also assess income, outgoings, and financial stability, not just the score. 
• Specialist lenders offer bad credit (adverse credit) mortgages, usually with higher interest rates and larger deposit requirements. 
• The severity and recency of your credit issues heavily influence mortgage approval chances. 
• A larger deposit (often 15–25%) can improve your likelihood of approval and potentially reduce interest rates. 
• Mortgage options for people with bad credit include mainstream mortgages (for minor/older issues), adverse credit mortgages, guarantor mortgages, joint mortgages, and buy-to-let mortgages. 
• Specialist brokers can increase approval chances by matching you with lenders who are more flexible toward bad credit. 
• Improving approval chances involves checking credit reports, correcting errors, paying debts on time, saving a bigger deposit, and reducing overall debt. 
• After securing a mortgage, consistent repayments and good financial management can rebuild your credit and open the door to better deals in the future. 
• If debts are overwhelming, UK debt solutions such as DMPs, IVAs, DROs, bankruptcy, or Scottish alternatives (Trust Deeds, DAS, Sequestration, MAP) may need to be considered with professional advice. 

FAQs

Can I get a mortgage with no deposit if I have bad credit?

Getting a mortgage with no deposit and bad credit is challenging but sometimes possible through schemes like Help to Buy or using an asset-backed mortgage approach.

How important is the electoral roll for mortgage applications with bad credit?

Being on the electoral roll is very important because it verifies your identity and address, which lenders use to assess risk.

Can I still get a mortgage if my credit score is low or nonexistent?

Yes, some specialist lenders assess the overall borrower profile instead of relying solely on credit scores and may approve mortgages based on affordability and income.

What alternatives exist to traditional mortgages if I have bad credit?

Alternatives include equity release, shared ownership, and rent-to-own schemes which may be more accessible if traditional mortgages are unavailable.