Getting a Mortgage with Credit Issues
Having bad credit doesn't automatically mean you can't get a mortgage. While some lenders will decline applications with adverse credit, others specialise in helping borrowers with imperfect histories. Whether you're remortgaging to escape a high SVR or looking to purchase, there are options available - though rates will typically be higher than standard products.
The severity and recency of credit issues affects your options. A satisfied CCJ from years ago is viewed very differently to an active default. Lenders also consider how your credit behaviour has improved since any problems occurred.
Types of Credit Issues Lenders Consider
Bad credit encompasses various issues: missed payments on credit commitments, defaults, CCJs, IVAs, debt management plans, bankruptcy, and repossessions. Each lender has different tolerance levels - some accept satisfied CCJs under certain amounts, others will consider defaults if they're old enough.
The key information lenders look at includes: when the issue occurred, whether it's satisfied or ongoing, the amount involved, and how you've managed credit since. More recent or larger issues are viewed more seriously, while older, smaller problems that have been resolved are often more acceptable.
Specialist Bad Credit Lenders
Lenders like Kensington, Pepper Money, Precise Mortgages, and Bluestone specialise in adverse credit lending. They manually underwrite applications, assessing your circumstances rather than just running automated credit scores. This means they can consider explanations for past problems and evidence of improved financial behaviour.
These lenders typically charge higher rates than mainstream products, reflecting the additional risk they take. However, securing a specialist mortgage can be a stepping stone - as your credit improves over time, you can remortgage to better rates.
Improving Your Approval Chances
A larger deposit helps offset credit concerns - higher equity means lower risk for lenders. Demonstrating current financial stability through steady income, manageable debts, and recent positive credit behaviour also strengthens applications.
Working with a broker who understands the adverse credit market is valuable. We know which lenders accept which types of credit issues and can match your application to appropriate lenders, avoiding unnecessary declines that could further impact your credit file.