Can you get a mortgage with bad credit?

It can be harder to a get a mortgage if you have a low credit score. This is because a lender will look at your credit file to understand your financial history.

If there’s lots of missed payments for bills or loans, it might suggest that you can’t afford a mortgage.

Getting a mortgage is a big decision and one that needs to be thought about carefully. Giving a mortgage to someone who cannot afford it isn’t good for the lender or the borrower. A home can be repossessed if a borrower can’t afford to repay their mortgage.

What is bad credit?

Bad credit means your credit file shows things that may put off lenders. This can include missed or late payments, or having lots of existing debt.

There is no one definition of a bad credit history. Different lenders have their own rules and elements they will look at.

Key things that can lower your credit score include:

  • Missing or late payments on credit cards, utility bills and other contracts
  • Failing to pay back a loan on time
  • Receiving a County Court Judgement (CCJ) or filing for bankruptcy
  • Having a high level of debt
  • Making too many credit applications that involve full credit checks (for mortgages, credit cards)
  • Sharing a joint account with someone else who has bad credit

Find out more about what affects your credit score.

How does bad credit affect applying for a mortgage?

If you have bad credit, lenders may think you will struggle to meet your mortgage payments. It shows in your past you had some money problems. This can put them off approving your mortgage application.

Some lenders might look in more detail as to why you have bad credit. Each credit rating agency (CRA) will determine your score differently. This can affect your application.

For this reason, it can be good to have explanations ready for things on your credit report that look bad. These could include:

  • Missed payments on a contract many years ago
  • Past debt that you have since cleared
  • Links to your partner's account who was the source of bad credit

Often if the lender can see your finances have gotten better, this might help your application.

Improving your chances of getting a mortgage with bad credit

If you have a poor credit history, you can try a few things to boost your chances to get a mortgage.

Improve your credit score

Improving your credit score isn’t a quick process, but there are steps you can take which might make a difference over time, including:

  • Pay your phone and utility bills on time
  • Register to vote
  • Pay off any debt before you apply for a mortgage
  • Check for mistakes on your credit report. Small errors like the wrong address can affect your score

More ways to improve your credit score

Save for a bigger impact

Saving up a bigger deposit may improve your chances of getting a mortgage if you have bad credit. This means you’ll need to borrow less from a lender and shows that you’re able to save up the deposit money.

Buy together

When you apply for a mortgage with someone else (like your partner or a friend), the lender will consider their credit score too. If they have a good credit rating, this can balance out your bad credit.

Use a guarantor

If you cannot buy with someone else, a lender may approve your mortgage if you have bad credit when you have a guarantor.

A guarantor is obligated to pay a mortgage if the original borrower is unable to. Not all lenders offer a guarantor mortgage.

Wait and reapply

If you apply for a mortgage with bad credit and the lender rejects it, wait at least six months before you reapply. This can help you for a few reasons:

  • Too many failed mortgage applications can further lower your credit rating
  • You have time to build your credit score before you reapply
  • Negative elements on your credit report become less important over time

The content on this page is for reference and does not constitute financial advice. For impartial financial advice, we recommend government bodies like MoneyHelper.

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