If you have a poor credit record, you’ll likely find getting a mortgage without the help of a broker tough. This is because you’ll have fewer mortgage options than someone with good credit.

In the past, people with bad credit who wanted to buy their first home would take out guarantor mortgages. Having a guarantor meant you had someone who agreed to pick up the payments should you have been unable to make them yourself.

Fortunately, there are a lot more options nowadays as there are a great deal more specialist lenders on the market who cater to people with bad credit. These lenders typically only accept clients through intermediaries like John Charcol.

So, instead of being limited to guarantor mortgage deals like you would have been in the past, you now have access to more lenders, deals and products when you use an expert broker like John Charcol.

Learn more about getting a bad credit mortgage with no guarantor in our guide.

Can I Get a Guarantor Mortgage with Bad Credit?

You wouldn’t get a bad credit mortgage with a guarantor nowadays as guarantor mortgages aren’t really available anymore. Once upon a time, they were suitable for people with poor credit ratings, on low incomes, or who were struggling to save money for deposits.

But now, instead of getting a guarantor mortgage, you’d use a broker such as John Charcol to arrange a bad credit mortgage from a specialist lender.

What Are Guarantor Mortgages and How Do They Work?

A guarantor mortgage is a special type of loan where someone else – typically a parent or older relative – agrees to cover your mortgage payments in case you are unable to. A guarantor mortgage is not the same as having a joint mortgage. Your guarantor is not added to the title deeds and has no ownership claim over the property. They are, however, included in the relevant legal documents associated with the mortgage.

Can I Get a Normal Mortgage with Bad Credit?

It's certainly possible to get a mortgage even if you have bad credit, but it ultimately depends on how serious the bad credit event was and how recently it occurred.

Most high street banks are likely to consider you as higher risk and reject your application if the event was serious or recent. Building societies can sometimes be more flexible, but you may have to focus on specialist lenders who cater to applicants with bad credit. This is where a mortgage broker like John Charcol can help.

Why Your Credit Profile Is Important

To explain why you may need a specialist lender, we must first explain how normal high street lenders assess your credit profile and what this means for your mortgage options.

If you’ve taken out a loan in the past and missed payments or you've had any other type of adverse credit event, this will show up on your credit record and affect your credit score.

Your credit score is a 3 digit number based on your financial history over the past 6 years and is available via credit reference agencies such as Equifax, Experian, or TransUnion. Your credit score is categorised as very poor, poor, fair, good, very good, or excellent.

Mortgage lenders don’t rely on the credit score provided by a credit reference agency. The majority of mortgage lenders prepare their own credit assessment during the Decision in Principle (DIP) stage of the mortgage application process. The lender includes the credit reference agency information alongside the information you provide about your payment history and your responses to the questions that they ask you. This means that the lender will see any adverse credit event on your credit record. And, due to the high volume of applications high street lenders receive, they’ll prioritise applicants with clean credit profiles over ones with adverse credit – increasing the likelihood that the latter will be rejected.

Getting a Bad Credit Mortgage No Guarantor

At John Charcol, our specialist mortgage brokers have access to specialist lenders who use a manual underwriting process on a case-by-case basis and don’t use a credit score at all. This process can be long and arduous but can provide enough assurance to a mortgage lender if your credit record is insufficient by normal standards.

Mortgages for people with a poor credit history are offered by specialist lenders and are known as bad credit mortgages, adverse credit mortgages, or sub-prime mortgages. With these kinds of mortgages, you’re likely to face higher interest rates and fees and may be required to pay a higher deposit but you won’t need a guarantor. Instead of saving a deposit that is 5% – 10% of the value of the property, you may have to save 20% – 25% for a bad credit mortgage deposit.


Bad credit specialist lenders cater to people with bad credit. They use a different approach to traditional mortgage lenders.

Instead of using information from a credit referencing agency (CRA), specialist lenders use a manual underwriting process when assessing borrowers for a mortgage.

This can include:

  • Income and expenditure assessment
  • Bank statements for proof of outgoings
  • Exploring why a borrower fell into bad credit - e.g. death, divorce, accident or health
  • Confirming positive action towards resolving bad credit
  • Exploring avenues to support borrowers in improving their financial circumstances

Specialist mortgage lenders can allow debt management plans (DMP) during the mortgage period, whereas traditional lenders would not. They may also work with a broker to create a debt consolidation plan if the borrower is remortgaging. Do note that specialist rates are higher than normal mortgage rates.

What Bad Credit Issues May Require a Bad Credit Mortgage?

There are various forms of bad credit that can negatively affect your chances of getting a mortgage:

  • You may have a low credit score due to a credit default or an adverse credit event
  • Adverse credit events include missing credit card payments, declaring yourself bankrupt, or if you have a County Court Judgement against you
  • If you have an Individual Voluntary Agreement (IVA) to pay debts back to a creditor you could face problems getting a mortgage

In these cases, it is advisable to contact a mortgage broker like John Charcol that specialises in assisting borrowers with bad credit.

How Can I Improve My Credit Score?

The higher your credit rating, the better your chances of being approved for a mortgage. If you’re not in a rush to buy or remortgage, a better idea might be to wait for a few months to work on improving your credit score, before you apply for a mortgage. This should mean you have wider access to traditional high street lenders who can offer you a better deal.

You can do the following to increase your score:

  • Bring any defaults or arrears up to date
  • Pay your utility bills and credit card debts on time and in full
  • Pay off any other debts that you have – such as car finance. If you can’t clear all these debts, pay off as much as you can
  • Register on the electoral roll
  • Think about reducing the number of accounts and credit cards you have, even if you're not overdrawn
  • Make sure you pay off your credit card each month. This will slowly increase your credit rating as it shows you meet your repayment deadlines regularly
  • If you have a good explanation for previous financial difficulties - such as being made redundant or ill health, consider adding a note of correction to your credit report so that lenders will be aware of this
  • Use your available credit in a sensible way. For example, make small purchases on your credit card and pay off the balance in full each month. This can help build your score because it shows that you’re making repayments on time

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