Getting a mortgage with bad credit

Quick recap

• Lenders want to be confident they’ll get their funds back, and they’ll look at your credit history to see whether you’ve got a good track record of borrowing money in the past

• Having negative information on your credit report can make it harder to get a mortgage as you’ll be seen as a bigger risk to lenders

• Credit issues typically stay on your report for six years. While you might choose to wait for your credit to improve over time, there are options available to help you remortgage or get on the property ladder sooner

• Working with an experienced mortgage broker could help to increase your chances of finding a suitable lender - though you may be offered higher interest rates or lower loan to value (LTV) mortgage products if you have poor credit 

• If you have a poor credit history, don't worry - you're not on your own. In fact, in 2024, around 12% of those seeking a mortgage with Mojo had credit issues*

• If we can’t find the right mortgage for you, our recommended partner Advantage Financial Solutions can help to find a suitable bad credit mortgage product

Are credit issues a big problem? 

How much your credit history impacts your mortgage application will depend on different factors, such as:

• 1.

  Which lender you choose. Each lender will have their own criteria and may view your application differently. What is deemed to be ‘bad credit’ by one lender may not be the same elsewhere. 

• 2.

  The severity of the issue. A missed payment here and there is unlikely to impact your application as much as a CCJ or default. 

• 3.

  How much time has passed. While money missteps will stay on your credit file for up to six years, they might not have as much impact on credit applications as time goes on. 

• 4.

  Whether the issue is resolved. Unpaid debts are more likely to be a red flag to lenders than debt that has now been satisfied (paid off).

• 5.

  The type of debt. Problems with unsecured debt, such as a personal loan or credit card, are typically seen as less severe than issues with secured debt like a mortgage. 

• 6.

  Your personal circumstances. The reason behind any credit issues can also impact how a lender views your application. For example, falling into debt due to illness or redundancy may not have as much of an impact - though you may need to provide evidence or add a notice of correction to your credit report.

6 ways to improve your chances of getting a mortgage… even with poor credit 

1. Review your credit file

Your credit file, also known as a credit report, is a summary view of your credit history. It includes details of any credit agreements and how you’ve managed them. 

Here’s why it’s worth getting a copy of your credit report:

• Get insight into why you might be deemed to have poor credit

• Check for any inaccuracies or errors. Contact relevant credit reference agencies to amend any mistakes you do spot, as even something as small as a typo could impact your credit score

• Spot any old financial associations - such as an ex-partner - that could be harming your credit score. You can submit a notice of dissociation to cut ties with people you’re no longer financially linked to. 

You’ll be able to obtain your credit report from credit reference agencies (CRA), the main three being Experian, Equifax and Transunion. Every CRA will hold its own credit report on you, so it’s worth getting a copy from each if you want to make sure the information is correct across the board. 

Where to get a copy of your credit report

• Experian: Experian uses their own data to generate your credit file.

• Checkmyfile: Data is collated from Experian, Equifax and TransUnion to generate your credit file.

• Clearscore: Uses Equifax to generate your credit file.

• Credit Karma: Uses TransUnion to generate your credit file.

We are not affiliated with any of these providers, and there are other providers not listed.

2. Get a mortgage in principle

It’s a good idea to apply for a mortgage in principle to get an idea of whether you’ll be accepted before going ahead with a full application. 

Most lenders will use a soft credit check at the mortgage in principle stage so you’ll get to find out your likelihood of acceptance without damaging your credit. 

3. Show you can manage credit well

Taking steps to address current or historic issues, as well as ensuring new problems don’t arise, will help significantly. 

• Make all your regular payments on time to show you’re a responsible borrower 

• Focus on paying down priority and high-interest debts. This will lower your debt-to-income ratio, which could help when lenders are assessing if the mortgage payments are affordable for you

• Limit new credit applications in the run-up to applying for a mortgage. Additional borrowing could impact your affordability, and each hard credit check could impact your credit score too 

• Build up your credit history if you have a thin credit file - for example, paying for utility bills or opening a credit builder credit card 

• If you’re a first-time buyer, show you can manage monthly mortgage payments by reporting your rent payments. Services like CreditLadder or Experian's Rental Exchange are a good place to start

4. Review your spending 

Lenders will assess your income and outgoings carefully. So, if you’re trying to prove you can handle your mortgage payments, it’s a good idea to show you can spend and save responsibly. 

• Try to keep excess spending to a minimum, to show you can manage your money well

• Keep your credit card utilisation (the percentage of your maximum credit limit used) below 30%

• Pay more than the minimum amount off your credit cards

• Stay out of your overdraft and never withdraw cash on a credit card

• Avoid payday loans or buy now, pay later schemes, as these could suggest you’re struggling with your finances

5. Join the electoral roll (if you haven't already)

The electoral roll, also known as the electoral register, is a list of everyone who is eligible to vote in the UK. Mortgage lenders and credit reference agencies check if you're on the electoral roll as a way of verifying your identity and current address. The longer you've been on it, the better.

You can check whether you’re on the electoral roll by getting a copy of your credit report or by contacting your local council. Make sure the information on your electoral roll record, such as your address and your surname, is accurate and up to date. Having a mis-match between your electoral roll record and the information on your mortgage application could cause issues. 

Register on the electoral roll on the GOV.UK website. Your local council will inform the credit reference agencies of your registration but it can take up to a few months for your report to be updated. It’s well worth registering, though, as experts at Experian suggest that signing up for the electoral roll can add up to 50 points to your credit score.

6. Lower your loan to value (LTV)

Your application is more likely to be accepted if you can lower the risk for the lender. Asking for a lower borrowing amount is a good place to start. 

You’ll likely find that low-deposit mortgages have a much tighter criteria, so it might be easier for you to secure a mortgage if you can apply for lower LTV products.

Lenders typically require those with bad credit to offer up a deposit over 15%. So if you can save up for a larger deposit in order to lower your LTV, you may find mortgages easier to access. 

How to get a mortgage with bad credit 

Poor credit doesn’t mean you can’t get a mortgage. Some lenders, known as bad credit or subprime lenders, specialise in supporting customers with a less-than-perfect credit history. You should be prepared for higher interest rates due to the increased risk to the lender, though.

Bad credit mortgage options

If you’re struggling to get a traditional mortgage due to past credit issues, there are a few alternative mortgage products that could help you get on the property ladder:

• Guarantor mortgages. Having a guarantor could improve your chances of getting a mortgage as, if you struggle to keep up with your mortgage payments, your guarantor will have to step in. This gives the lender extra reassurance.

• Gifted deposits. A gifted deposit - money provided by friends and family that you’re under no obligation to repay - can help you to lower your LTV, which can boost your chances of acceptance. 

• Joint mortgages. Buying jointly with friends or family can support a mortgage application - particularly if the other person has good credit. However, by doing this, you’ll be financially linked and any missed payments will affect both of your credit scores.

Though our Mortgage Experts will always try to find our customers the most suitable mortgage product for their needs, sometimes we can’t help with mortgages for those with poor credit as it requires more specialist knowledge.

You can either find an appropriate bad credit mortgage specialist yourself, or work with our recommended partner Advantage Financial Solutions. Advantage Financial Solutions specialises in finding mortgage solutions for customers with poor credit and will be able to discuss your options with you. 

Important information about our partnership with Advantage Financial Solutions

Mojo Mortgages offers introductions to its available preferred partners and may receive an introduction fee from the partner. Fee details can be found here. Advantage Financial Solutions is directly authorised and regulated by the Financial Conduct Authority (FCA) under firm reference number 965036. Access their Privacy Policy.

*All data shown is from Mojo Mortgages' own customer records, covering the period from January 1, 2024, to December 17, 2024.