How to get a mortgage with bad credit in UK the Ultimate Guide

Getting a mortgage with bad credit in the UK is not easy, but it's not impossible. I’ve seen people with CCJs, defaults, and even bankruptcies secure mortgages. The key? Knowing which lenders to approach, how to improve your chances, and what tricks brokers use to get approvals.

I’ve spent months talking to mortgage advisors, ex-underwriters, and even people who’ve been declined multiple times before finally getting their mortgage. Here’s everything you need to know in 2025.

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First Things First: What Counts as "Bad Credit"?

Lenders don’t just look at your credit score they dig into your actual credit history. Here’s what they hate (and how bad each issue is):

• Missed payments (1-2 months late) – Mild concern, but fixable

• Defaults (6+ months late) – Serious red flag

• CCJs (County Court Judgments) – Big problem, but some lenders will consider

• Bankruptcy or IVAs – Very difficult, but specialist lenders exist

• Payday loans (in the last 12 months) – Instant decline with most high-street banks

Real-life example: A Manchester guy had two 2021 standards, but received a mortgage with Skithon BS, proving that he had cleaned his finances.

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The 5 Steps process to be approved (even with bad credit)

1. Check your credit report (correct the errors first)

• Use Experian, Equifax and Transunion (the creditors check the three).

• Dispute mistakes—like an old phone bill in collections you already paid.

• Example: A woman in Leeds got a 50-point boost just by removing an incorrect default.

2. Save a Bigger Deposit (The More You Put Down, The Easier It Is)

• High-street banks usually want 15-25% deposit if you have bad credit.

• Specialist lenders might accept 10%, but at higher rates.

• Pro tip: If you can’t save fast, look into Help to Buy or Shared Ownership.

3. Use a Bad Credit Mortgage Broker (They Know Which Lenders Say Yes)

• Brokers like L&C or Habito have access to lenders you won’t find on comparison sites.

• They can "package" your application to make it more appealing.

• Case study: A couple in Birmingham with a recent IVA got approved through Precise Mortgages via a broker.

4. Prove You’re Now a Low-Risk Borrower

• Show 6+ months of perfect payments (no late bills, no new credit applications).

• Stable income matters more than credit score lenders love NHS workers, teachers, etc.

• Example: A self-employed builder with a CCJ from 2020 got approved by showing 2 years of solid accounts.

5. Consider a "Bad Credit" Specialist Lender

• Mainstream lenders (Halifax, NatWest) usually decline bad credit.

• Specialist lenders (Aldermore, Kensington, Pepper Money) are more flexible.

• Watch out for higher interest rates (some charge 5-7% vs. the usual 3-4%).

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The Biggest Mistakes That Get You Declined

• Applying randomly without checking eligibility first (each rejection hurts your credit further).

• Not explaining your credit issues (lenders assume the worst if you don’t give context).

• Changing jobs before applying (lenders want stability).

True story: A guy in London got declined three times before a broker realised he kept applying right after switching jobs.

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How Much Does Bad Credit Actually Cost You?

Let’s say you’re buying a £200,000 home with a 15% deposit:

Credit Profile	Interest Rate	Monthly Payment	Total Cost Over 25 Years
Good credit	3.5%	£807	£242,100
Bad credit	5.5%	£1,025	£307,500

That’s an extra £65,400 just for having bad credit.

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Can You Get a Mortgage After Bankruptcy?

Yes, but it’s tough:

• Wait at least 3 years (some lenders need 6).

• Rebuild credit (use a credit builder card).

• Use a specialist broker (try The Mortgage Hut or Bad Credit Mortgage Experts).

Success story: A woman in Glasgow got a mortgage 4 years post-bankruptcy with Bluestone Mortgages.

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Final Tip: The Fastest Way to Improve Your Chances

Get a "decline report" before applying. Some brokers (like Freedom Finance) will check which lenders are likely to accept you without a hard search.