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

Bad credit does not automatically close the door to homeownership in the UK. The mortgage market has a specialist segment — sometimes called the adverse credit or sub-prime market — that serves borrowers whose credit histories make them unacceptable to mainstream high-street lenders. These specialist lenders assess risk differently, lend at higher interest rates to compensate for the perceived additional risk, and typically require larger deposits as further protection.

The critical insight most people with bad credit miss is that there is no single "bad credit mortgage". The market segments precisely according to the type and age of adverse credit — a borrower with one satisfied default from three years ago occupies a very different lending tier from someone with an active IVA or a bankruptcy discharged six months ago. Understanding where you sit in this spectrum is the starting point for any realistic planning.

What adverse credit can lenders work with — and how difficult is it?

Rate premiums and deposit requirements are approximate mid-2025 estimates. Actual terms vary significantly by lender, income, property type, and the full credit profile. These are not guarantees — speak to a specialist broker for your specific situation.

Each type of adverse credit explained

Missed payments

A missed payment — sometimes called a late or delinquent payment — is registered when a credit account payment is not made within 30 days of the due date. Most mainstream lenders decline applications with any missed payments in the last six to twelve months. Specialist lenders will consider applications with missed payments, with the key variables being recency (how recently it occurred), frequency (how many times), and account type (a missed credit card payment is treated less severely than a missed mortgage payment).

A single missed payment from two or more years ago with a clean record since is relatively minor in the specialist market and may even be acceptable to some higher-street lenders with a compelling explanation. Multiple missed payments across several accounts in the last twelve months represent significantly more adverse history and will restrict available lenders considerably.

Defaults

A default is registered when a creditor gives up on recovering regular payments and formally marks the account as in default — typically after three to six months of non-payment. Defaults remain on the credit file for six years from the date they were registered. A satisfied default means the outstanding balance has been paid in full; an unsatisfied default means it has not. Most specialist lenders will consider satisfied defaults more favourably than unsatisfied ones. The value of the default also matters — a £200 mobile phone default is treated differently from a £15,000 personal loan default.

County Court Judgements (CCJs)

A CCJ is a court order issued when a creditor successfully sues for a debt in the county court. It is a more serious adverse marker than a default because it involves a legal process and implies the debtor did not engage with the creditor's attempts to recover the debt. CCJs remain on the Register of Judgements and the credit file for six years. Like defaults, satisfied CCJs (where the full amount has been paid, ideally within 30 days of the order to have it marked "satisfied") are treated more favourably. A CCJ registered within the last 12 months with a large value and unsatisfied status will make mortgage lending very difficult even with specialist lenders.

Individual Voluntary Arrangements (IVAs)

An IVA is a formal insolvency procedure where an agreement is made with creditors to repay a portion of debts over typically five to six years. During an active IVA, taking on new credit above a small threshold (usually £500) requires the permission of the insolvency practitioner, making mortgage borrowing effectively impossible. Once an IVA is completed and you have been discharged, specialist lenders will consider applications — though deposit requirements of 25–35% and significant rate premiums apply. The IVA remains on the credit file for six years from its start date.

Bankruptcy

Bankruptcy is the most serious adverse credit situation for mortgage purposes. While bankrupt, you cannot borrow more than £500 without disclosing your status. Once discharged (usually after 12 months), mortgage applications become theoretically possible, but in practice very few lenders will consider an application within three years of discharge. Even after three years, deposit requirements of 30–40% and substantial rate premiums apply. After six years, the bankruptcy drops off the credit file and mainstream lending becomes available again — though a whole-of-market broker will still be valuable in finding the most competitive deal.

Three real borrower profiles — what happened in practice

The real cost of bad credit — rate premiums in pounds

Understanding the financial impact of a rate premium helps quantify both the cost of proceeding now versus waiting to improve your credit. The table below shows what the most common rate premiums cost in real monthly and five-year terms on three common loan sizes.

Approximate mid-2025 estimates. Monthly payments on 25-year repayment basis. The "5-yr extra cost" column shows total additional interest paid over a five-year fixed period compared to a clean-credit borrower at the same loan amount. Figures illustrate the financial case for improving credit before applying where circumstances allow.

At the severe adverse tier on a £200,000 mortgage, the five-year additional cost of proceeding now versus waiting 12–18 months to improve the credit profile can exceed £15,000. This is a genuine financial calculation every adverse credit borrower should work through with their broker: the cost of waiting (continued renting or SVR payments) versus the cost of proceeding at a premium rate. In many cases, a 12–18 month wait to clear outstanding issues and build a clean record significantly outperforms the cost of taking the first available specialist deal.

How to improve your chances of getting a mortgage with bad credit

1. 1
   Get your credit reports from all three agencies before doing anything else

   Equifax (via ClearScore), Experian, and TransUnion (via Credit Karma) each hold slightly different data. Check all three for errors — incorrect addresses, accounts that are not yours, or payments marked as missed that you paid on time. Correcting errors on your credit file is the one improvement that costs nothing and can have immediate impact. Dispute any inaccurate negative entries directly with the credit reference agency.

2. 2
   Settle any outstanding defaults or CCJs as soon as possible

   Unsatisfied defaults and CCJs remain on your file for six years, but their impact is significantly worse while unsatisfied. Paying them off changes their status to "satisfied" — which most specialist lenders treat substantially more favourably. If you cannot pay them in full, contact the creditor to negotiate a settlement. Even a partial settlement marks the account as resolved rather than outstanding, which improves the picture for lenders.

3. 3
   Build at least 12 months of clean payment history after adverse events

   Specialist lenders look at the trajectory of your credit behaviour, not just the presence of adverse markers. A 12-month clean record after settling defaults demonstrates that your finances have stabilised. Every month of on-time payments adds to this track record. For borrowers who have recently resolved credit issues, the question is simply one of time — building a run of clean history that the lender can see.

4. 4
   Save the largest possible deposit

   A larger deposit reduces the lender's risk and unlocks better rates and more lender options in the adverse credit market. Moving from a 15% to a 25% deposit can unlock additional specialist lenders and meaningfully reduce the rate premium. The relationship between deposit size and available options is more pronounced in the adverse credit market than in standard mortgages — every percentage point of additional deposit has real value.

5. 5
   Use a whole-of-market broker who specialises in adverse credit

   This is not optional for most adverse credit applicants — it is essential. Specialist adverse credit lenders do not appear on comparison sites and many do not accept direct applications. An experienced adverse credit broker knows which lenders have the most flexible policies for your specific combination of issues, income type, and deposit. They will also know how to present your application — providing context and supporting documentation that a tick-box online form cannot accommodate. Multiple direct applications to lenders leave hard searches on your file; a broker makes one targeted application to the most suitable lender.

Realistic timeline for credit recovery and mortgage access

• Now
  Check all three credit reports and resolve errors
  Free and immediate. Incorrect entries corrected now improve your profile within weeks and cost nothing.
• 1–3 months
  Settle any outstanding defaults or CCJs
  Pay or negotiate a settlement on any outstanding adverse markers. The "satisfied" status typically shows on your file within one to two months of payment.
• 3–6 months
  Register on electoral roll, reduce credit card utilisation, build clean history
  Each month of on-time payments adds to your clean track record. Reducing card balances below 30% utilisation improves your score within one to two billing cycles.
• 12 months
  Most specialist lenders consider settled adverse issues
  With 12 months of clean history after settling defaults or CCJs, the population of specialist lenders willing to consider your application grows considerably. This is the minimum threshold for most adverse credit products.
• 2–3 years
  Significantly better rates and more lender options
  Most adverse markers have substantially less weight after two to three years. Rate premiums reduce, deposit requirements may ease, and more specialist lenders become competitive for your application.
• 6 years
  Adverse markers drop off the credit file entirely
  All defaults, CCJs, IVAs, and bankruptcy entries drop off the credit file six years after registration. At this point your credit file is clean and mainstream lenders can consider your application on its current merits alone.

Common mistakes when applying for a bad credit mortgage

• Applying directly to multiple lenders and accumulating hard searches. Every formal mortgage application leaves a hard search on your credit file. Multiple hard searches within a short period signal desperation to lenders and can further damage your score. A broker makes one targeted application to the right lender — protecting your file from unnecessary searches.
• Not disclosing adverse credit history upfront. Lenders discover your credit history during their own checks. Failing to mention a default or CCJ you believe to be minor does not make it disappear — it just means the lender discovers it rather than having it explained in context. A broker will know how to frame adverse history in the most favourable light within the application.
• Trying to get a mortgage while a DMP or IVA is still active. The answer is almost always no. Specialist lenders may in very rare circumstances consider applicants in certain DMP situations, but the time spent attempting this is almost always better spent completing the arrangement and building clean history. Your broker will tell you clearly when the timing is not right.
• Assuming the first specialist deal is the best available. The adverse credit market is competitive. Different specialist lenders price different types of adverse credit differently. A lender that is best for recent defaults may not be best for old CCJs. Without a broker covering the full specialist market, you have no way of knowing whether the first approval you receive is the best you could access.
• Not planning for the improvement trajectory. A mortgage obtained at 6.5% with adverse credit is not a life sentence. Every two to five years at renewal, your adverse markers are older and the terms available to you improve. Understanding this trajectory — modelling what rate you might access in two years versus now — is part of the full financial planning picture that a good broker provides.

Frequently asked questions

• Can you get a mortgage with bad credit in the UK?
  Yes, in many cases. Specialist adverse credit mortgage lenders accommodate borrowers with missed payments, defaults, CCJs, IVAs, and even discharged bankruptcy — though terms depend heavily on the type, severity, and age of the credit issues. High-street banks will typically decline, but the specialist mortgage market exists specifically for these situations. A whole-of-market broker with adverse credit experience is the most effective route.
• How long after a CCJ can you get a mortgage in the UK?
  Many specialist lenders will consider a mortgage application with a CCJ after 12 months, though rates will be significantly higher and a deposit of 15–25% or more is typically required. After three years, more lenders become available and rates improve. After six years, the CCJ drops off the credit file entirely and mainstream lenders can consider the application. Whether the CCJ is satisfied, its value, and any other adverse credit on the file all affect which lenders are available.
• Can I get a mortgage after a default in the UK?
  Yes. Defaults are common and specialist mortgage lenders deal with them regularly. A satisfied default over two years old is treated much more favourably than a recent or unsatisfied one. Some specialist lenders accept satisfied defaults within the last 12 months, though at higher rates and lower LTVs. The number of defaults, their combined value, and whether they are satisfied all affect availability and pricing.
• Can I get a mortgage after an IVA in the UK?
  It is possible after an IVA is completed and you have been discharged — but it is one of the more challenging adverse credit situations. While the IVA is active, mortgage lending is not possible. Once completed, specialist lenders may consider an application with a 25–35% deposit and significant rate premium. After six years from the IVA registration date it drops off the credit file and mainstream options become available.
• How much extra do you pay on a mortgage with bad credit?
  Rate premiums vary from 0.3–0.8% for minor adverse credit (single old missed payment) to 3–5% for severe recent adverse (recent bankruptcy). On a £200,000 mortgage, a 2% rate premium costs approximately £222/month extra and approximately £13,320 in additional payments over a five-year fix. This is why improving your credit profile before applying — even if it means waiting 12–18 months — often saves a very significant sum.

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