Learn about how to get a mortgage with bad credit, the best lenders for bad credit mortgages, and current bad credit mortgage rates.

Missed payments (defaults)

Failing to make payments on time – either on bills or on outstanding debts – can be recorded as a default on your credit history. However, not all defaults are equally bad.

Generally, missing a mortgage payment is considered one of the worst types of default. Lenders are likely to be reluctant to lend to a person who has missed a mortgage payment at any point.

By contrast, missing payments for other types of bills may be considered less serious, though still to be avoided. Quantity is also relevant: not paying your phone bill for six months running will be seen more negatively than missing a single month.

If you have a series of payment defaults, your best option is to build up a history of paying bills and loans fully and on time. Lenders will want to see a prolonged period – up to two years – where you have met your repayments as evidence of your improved financial management.

Some banks offer ‘payment holidays’, where you can opt out of paying your loans for a fixed period. In some cases, however, these suspended payments may be recorded on your history as defaults. If this happens to you, contact your bank to negotiate having them removed.


Debt management plans or IVAs

If you are in severe debt, a debt management plan may help you climb out of the hole. Under these plans, you come to an agreement with your creditor to repay a limited amount of your debt each month.

Alternatively, you can seek out an individual voluntary agreement, or IVA, which allows you to make affordable payments towards your debt over the long term, often five to six years. IVAs are recorded in a public register and while you have one in place, your creditors can’t demand full repayment.

On your credit file, however, both IVAs and debt management plans are usually recorded as a series of defaults. Each month you fail to meet your minimum payment, your credit history takes a hit. This can have a severe impact on your overall credit score.

In general, banks will look for your debt management plan to have been fully paid out, followed by 12 months of on-time payments, before considering offering a mortgage.

In the case of IVAs, you may need to wait three to four years after completing the plan before applying for a mortgage.


County court judgments (CCJs)

A county court judgment, or CCJ, can be ordered against you if you owe somebody money and fail to pay it. A CCJ will stay on your record for six to seven years, and can be made for even minor sums.

Banks will consider the amount ordered against you in the County Court when deciding on your mortgage application. Some banks use thresholds to make their decision, so that a CCJ for £250 to £500 will be treated differently from one for more than £1,000.

In most cases, even high-street lenders may accept a CCJ on your record if it is over three years old and paid out or ‘fully satisfied’. On the other hand, a ‘partially satisfied’ CCJ – meaning a debt where only a portion has been paid back – is likely to damage your chances.

When facing a CCJ, always try to pay off the sum in full. Even if the creditor agrees to settle for a smaller amount, the CCJ may be recorded as ‘partially satisfied’ on your record and could potentially count against your mortgage application.



In dire circumstances, declaring yourself bankrupt may be your only option. Most high street lenders will refuse to lend to people with a bankruptcy on their record, even if it happened in the distant past.

Specialist lenders may consider your application if the bankruptcy is discharged and occurred more than six years ago. Your chances will be higher if you can offer an explanation for what happened and show how your circumstances and financial management have improved since then.

Checking your credit score

Whether or not you think these factors apply to you, you should always check out your credit report before applying for a mortgage.

The three biggest organisations for this are TransUnion (formerly Callcredit), Equifax and Experian. If you’re concerned, it’s worth checking how you fare with all three companies, as they all score slightly differently.

Once you have your report(s), consider what you can do to improve your credit rating, and check that all the information on record about you is correct.

In some cases, it will be better to wait until your credit history has improved so you can access more affordable mortgage deals. A good mortgage broker will be able to advise you on what mortgage deals you’re likely to be accepted for or whether you’re better off waiting.

It’s worth being cautious about applying for a mortgage if you think you might be rejected. Every time you make an application for credit, it gets recorded on your credit history, and unsuccessful applications can bring down your score.

If you’re applying for a mortgage in principle, lenders may be able to conduct a ‘soft check’, which does not show up on your record. However, be aware that a soft check may not uncover everything in your history, so your mortgage application could fail if issues come to light later.