Don’t Let Bad Credit Stop You from Getting a Mortgage

04 Feb

Don’t Let Bad Credit Stop You from Getting a Mortgage

As a specialist mortgage broker, we take pride in helping individuals achieve their dream of homeownership—no matter how complex their situation may be. Every day, we assist clients with a wide range of mortgage enquiries, from straightforward cases to those with more challenging financial histories.

One of the most common questions we hear is: “Can I still get a mortgage with a poor credit history?

The idea of securing a mortgage with bad credit can feel overwhelming, but it’s far from impossible. Many lenders understand that financial difficulties happen and offer specialist mortgages designed for those with less-than-perfect credit. Whether you’ve missed payments, had a County Court Judgment (CCJ), or even declared bankruptcy, there are still options available.

In this guide, we’ll walk you through the key steps to improving your chances of securing a mortgage, even with past credit issues.

1. Understand Your Credit Report

Before applying for a mortgage, it’s important to know where you stand. Request a copy of your credit report from agencies like Experian, Equifax, or TransUnion. Review your history carefully—any errors or outdated information could be holding your score back. Even small corrections can improve your chances of approval.

2. Save for a Larger Deposit

A bigger deposit can work in your favour, as it lowers the lender’s risk and improves your mortgage options. While most mainstream lenders ask for at least 10%, those with bad credit may need 15-20% to access better rates and more flexible terms.

3. Consider a Gifted Deposit

If a family member is in a position to help, a gifted deposit could make a big difference. This is a financial gift—typically from parents or close relatives—that helps cover part or all of your deposit. Since it doesn’t need to be repaid, it strengthens your application without increasing your financial burden.

4. Explore Guarantor Mortgages

If your credit history is making it difficult to get approved, a guarantor mortgage might be an option. This involves a family member (usually a parent or close relative) agreeing to cover the mortgage payments if you’re unable to. Their support reassures the lender, increasing your chances of approval.

5. Work with a Specialist Mortgage Broker

Not all lenders take the same approach to bad credit. As a specialist mortgage broker, we have access to lenders who aren’t always available on the high street and who consider applicants with past financial difficulties. We can help match you with the right mortgage for your situation, ensuring you secure the best possible deal.

6. Consider Specialist Lenders

Traditional high street banks often have strict lending criteria, making it harder for those with bad credit to get approved. However, specialist lenders focus on affordability rather than just your credit score, meaning you could still find a suitable mortgage.

7. Take Steps to Improve Your Credit Score

If you have time before applying, boosting your credit score can improve your mortgage options. Simple steps include:

  • Paying bills and loan repayments on time
  • Reducing outstanding debts
  • Registering on the electoral roll
  • Keeping credit card utilisation low (below 50% of your limit)

8. Show Proof of Financial Stability

Lenders want reassurance that you can manage your mortgage payments. Having a stable income, a strong employment history, and a low debt-to-income ratio can strengthen your application. Be ready to provide payslips, bank statements, and any other necessary documents.

9. Be Prepared for Higher Interest Rates

Bad credit mortgages often come with higher interest rates, but this doesn’t have to be a long-term issue. Once you secure a mortgage and make regular repayments, your credit score will improve—putting you in a better position to remortgage on more favourable terms in the future.

Final Thoughts

Having bad credit doesn’t mean homeownership is out of reach. By taking the right steps—saving for a larger deposit, exploring specialist lenders, and working with an experienced mortgage broker—you can improve your chances of success.

If you’re ready to explore your mortgage options, we’re here to help. Contact Impact Specialist Finance today for expert advice tailored to your situation.