Missed payments, defaults, County Court Judgments and even previous bankruptcy don’t automatically rule you out. There are specialist lenders who look at the full picture. We know who they are and how to approach them effectively.
A bad credit mortgage, sometimes called an adverse credit mortgage or a subprime mortgage, is a product designed for borrowers whose credit history doesn’t meet mainstream lender criteria. The MoneyHelper guide to credit scores explains how your credit history is built up and what affects it. Understanding where you stand before applying is important, and we’d encourage you to check your own credit file through Experian, Equifax or TransUnion before we speak. Each agency holds slightly different data, so it’s worth checking all three.
A single missed payment from several years ago is treated very differently from repeated recent arrears. Lenders look at the recency, frequency and severity of any missed payments. One or two old missed payments may not affect you significantly, whereas recent or ongoing arrears will require a specialist lender.
A default is registered when you fail to repay a debt after a formal notice. Defaults stay on your credit file for six years from the date of registration. Satisfied defaults, where you’ve repaid the debt, are viewed more favourably than outstanding ones. Some specialist lenders will consider applications even with recent defaults.
A CCJ is a court order issued against you for an unpaid debt. It stays on your credit file for six years unless it’s satisfied within one month of the judgment, in which case you can apply to have it removed. You can check whether you have any CCJs registered against you on the Registry Trust website. Satisfied CCJs registered more than three years ago are often acceptable to certain specialist lenders.
An IVA is a formal agreement with your creditors to repay a portion of your debt over a fixed period. Bankruptcy is a more serious insolvency measure. Both affect your credit profile significantly, though there are lenders who will consider applications once a set period has passed after discharge. The Insolvency Service guidance on bankruptcy explains the timeline and implications.
A previous mortgage repossession is one of the more serious adverse credit events in the eyes of most lenders. Specialist lenders may consider applications several years after a repossession, particularly where the circumstances have improved significantly.
A buyer has three missed mortgage payments from four years ago following a period of redundancy. Since then, they’ve been in steady employment with no further credit issues. Their credit file shows the missed payments as satisfied. A specialist lender considers the full context and offers a mortgage at a slightly higher rate than mainstream, which reduces as the adverse credit ages off the file.
A first time buyer has a satisfied CCJ for £900 from three years ago, which arose from a disputed phone contract. The rest of their credit file is clean. Several specialist lenders are comfortable with this, and the buyer is able to proceed with a 15 percent deposit at a rate that reflects the historic CCJ but is still manageable within their budget.
A sole trader has a default registered two years ago during a difficult trading period. Their business has since recovered, and they have two years of strong accounts to show. This is a more complex case combining self employed income assessment with adverse credit, and it’s one where specialist lender selection makes a real difference. See our self employed mortgages page for more on how lenders assess self employed income alongside adverse credit.
There are practical steps you can take before applying that can meaningfully improve your chances and the terms you’re offered. The FCA’s guidance on mortgage applications explains what lenders are required to assess. In practical terms:
Yes, in many cases. The key factors are how old the CCJ is, whether it’s been satisfied, and how much it was for. Satisfied CCJs more than two to three years old are often acceptable to specialist lenders.
Most adverse credit markers, including defaults, CCJs and missed payments, stay on your credit file for six years from the date they were registered.
Initially, yes. Specialist lenders charge a premium reflecting the higher risk profile. The strategy for most borrowers is to take what’s available now and remortgage onto standard terms once their credit file improves, typically after two to three years.
It depends on the severity of the credit issue. Minor historic adverse credit might only require a 10 to 15 percent deposit. More serious issues such as recent defaults or a CCJ may require 25 percent or more.
Applying directly to multiple lenders can leave multiple credit search footprints on your file, which can make subsequent applications harder. Working through a broker means one soft search is used to match you with the right lender before a formal application is made.
Most people assume a difficult credit history means no mortgage. In most cases, that isn’t true. We work with specialist lenders who look at your full situation rather than just a credit score. People come to us after being turned away by their bank and leave with a mortgage offer. It happens regularly. Find out what’s possible for your situation.
If any of those sound familiar, you’re in the right place. We assess each case individually and match you to the lenders most likely to say yes. Talk to us about your credit history, and we’ll give you an honest picture of what’s available.
