How Can I Get a Mortgage with a Poor or Bad Credit Score?

Answered on 12 January 2022 by

I have a poor credit score. Do bad credit mortgages exist and could I get one? And how can I improve my credit score?

Sophie Waugh

It is possible to get a mortgage with poor/bad credit in the UK, however the lenders and products available to you will depend on the nature of the bad credit and how recent it was.

If it was over 6 years ago then the chances are that any bad credit or missed payments will no longer show on your credit file. Any period shorter than this could impact your credit score.

Things which could contribute to a poor credit score include:

  • Large amounts of debt relative to your income – excluding student loans
  • Missed mortgage payments
  • Missed or late rent, bill and/or credit card payments
  • Not registering on the electoral roll at current or previous addresses
  • Regularly maxing out credit cards
  • Exceeding your agreed overdraft limit

Some first-time buyers have low credit scores simply because they haven’t built up their credit history yet, rather than because they have any adverse credit. If you’re a first-time buyer with a low credit score, you might want to improve your credit score before applying for a mortgage, as it’ll give you access to more lenders and better deals.

Use our free and easy tool to compare some of the first-time buyer mortgages that are currently on the market. It’ll give you an idea of the deals you could apply for with a good credit score.

We also go through some tips on how to improve your credit score a little later on.

If you do have adverse credit, then you may want to consider specialist adverse credit lenders as well as lenders that only credit check, rather than credit check and credit score. All lenders credit check but not all of them credit score. These lenders assess applications slightly differently, which could help you get a mortgage with bad credit.

What Is the Difference Between a Credit Score and a Credit Check?

Credit Score

A credit score is a 3 digit number that’s calculated based on your borrowing and overall financial behavior from the past 6 years.

There are 2 kinds of credit score you need to be aware of:

  • The score given to you by a credit reference agency – e.g. Experian, Equifax, Credit Karma, etc.
  • The score given to you by a lender for your mortgage application

When credit reference agencies give you a credit score they also give you a grade that ranges from very poor to poor, good, very good and excellent.

The scores given to you by credit reference agencies are for borrowers rather than lenders as they only give you a rough idea of your credit worthiness. No mortgage lenders use the credit scores that credit reference agencies give you as there are other factors they need to consider.

Some factors include:

  • Address history
  • Employment history
  • Income breakdown
  • The level of debt you have compared to your income

When you apply for a mortgage, the first stage is the DIP (Decision in Principle). This is when the lender uses your credit score to assess whether they’ll grant you a mortgage. To do this, these lenders review the information credit reference agencies hold on you – i.e. they perform a credit check - and give points based on the information you provide them with on your application to calculate your score. All the big lenders credit score.

Lenders set their own minimum credit score requirements for mortgages in the UK. As a general rule, it’s unlikely you’ll get a mortgage from a high street lender unless you have a very good or excellent credit score.

Any bad credit and/or defaults from the last 6 years will count against you and could see you fail the credit score of most if not all the high street banks and building societies.

Fortunately, there are lenders that don’t credit score at all. They only perform a credit check which allows them to take a more subjective approach when considering your credit history.

Credit Check

The lenders that only credit check still obtain information on your credit history from credit reference agencies, but they don’t give points for each question they ask as part of the application process. Instead, they manually underwrite your application and judge it on its overall merit.

A lot of these lenders offer adverse credit mortgages. By looking at the application as a whole rather than focusing on a score, they can be slightly more sympathetic towards cases that would have a low credit score. Nonetheless, it’s worth bearing in mind that lenders which don’t credit score and only credit check still may not necessarily accept your application.

It’s best to speak to a mortgage broker with expertise in poor/bad credit mortgages like John Charcol, as we know which lenders to approach and the kinds of products they offer. Furthermore, many of the lenders that provide mortgages for people with bad credit won’t deal with borrowers directly; they require that you use a intermediary.

How to Improve Your Credit Score

  • Register on the electoral roll/voters roll as quickly as possible
  • Pay rent and all bills on time
  • Put any ad hoc credit commitments onto direct debit
  • Don’t max out your credit cards

If you can't wait for your credit score to improve, you may want to look at mortgage lenders that don’t credit score but take a credit check only approach and underwrite on a case-by-case basis.

It’s also worth noting that if you have any joint financial connections – e.g. a joint current account, credit card or even rental agreement – you may want to consider that both of you try to improve your credit score. This is because a credit check on one partner’s name can bring up aspects of the other’s credit history by financial association, which could impact either of you. 

Ask The Mortgage Experts answers are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them. We recommend you seek professional advice with regard to any of these topics where appropriate.


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