A CCJ, a default, a missed payment, an IVA or even a past bankruptcy can feel like it's shut the door on ever owning a home. In most cases it hasn't. Specialist lenders exist specifically to look past a credit event and assess the fuller picture instead, and a mortgage broker at Quanstrom Financial can point you towards exactly which lenders are realistic for your situation, rather than you guessing and collecting declines along the way.
Key takeaway: Very few credit issues rule someone out of a mortgage completely. What actually matters is the type of issue, how long ago it happened, whether it's settled, how big it was, and your deposit. Get those five things clear and a mortgage broker at Quanstrom Financial can usually find you a realistic route forward, even with a recent, significant credit event.
[[stats: 5%=Typical minimum deposit with the right lender | 6 Years=Typical time an issue stays on your credit file | Whole of market=Access to specialist lenders in one place]]
You might be overestimating how serious your credit issue is
One of the most common things we see is someone assuming their credit history is far worse than it actually looks to a lender. A handful of small, historic defaults or a couple of missed payments can feel enormous when you're the one who lived through them, but a lender looks at the same facts very differently: the size of the amounts involved, how long ago they happened, and whether they've been resolved.
Good to know: What you perceive as a serious credit problem can genuinely be seen as mild by a lender, and vice versa. Several small, low-value defaults from a few years ago that are now settled can sometimes be accepted by a mainstream high street lender, not just a specialist one. The only way to know for sure is to have your actual situation assessed properly, rather than assuming the worst and ruling yourself out before you've even applied.
What actually counts as "adverse credit"?
"Adverse credit" is a broad term covering several quite different situations, and lenders treat each one differently.
[[table: Credit issue | What it means ;; County Court Judgement (CCJ) | A court order made against you for an unpaid debt ;; Default | A creditor formally recording that you've fallen behind on payments ;; Missed or late payment | A payment made late or missed on a credit card, loan or existing mortgage ;; Debt management plan (DMP) | An informal, reduced-repayment arrangement agreed directly with your creditors ;; Individual Voluntary Arrangement (IVA) | A formal, fixed-term agreement to repay your creditors, usually over around 5 years ;; Bankruptcy | The most serious credit event, where most debts are written off but assets may be sold ;; Repossession | A previous property being repossessed after mortgage payments stopped ]]
What actually matters to a lender?
Rather than asking "do I have bad credit", it's more useful to think about the specific factors a lender will actually weigh up.
[[table: What lenders weigh | Why it matters ;; Type of issue | A missed phone bill is treated very differently to a mortgage default or bankruptcy ;; How long ago it happened | Older, settled issues are far easier to get past than recent, active ones ;; Settled or still outstanding | An outstanding CCJ or default is much harder to get past than one that's fully repaid ;; Size of the debt | A small, historic issue is easier to look past than a large, recent one ;; Your deposit | A bigger deposit generally opens up more lenders and can improve the rate on offer ;; Your conduct since | A clean record since the event is one of the strongest signals you can show a lender ]]
How long does adverse credit stay on your file, and does that change your options?
Most credit issues follow a similar pattern: the more time that's passed since they were resolved, the more lenders open up to you.
[[steps: Within the last 12 months|Fewer lenders will consider you, and a larger deposit is usually needed ;; 1 to 3 years since it was settled|More specialist lenders open up, though terms are still tighter than a standard mortgage ;; 3 to 6 years since it was settled|A wider range of lenders becomes realistic, often closer to standard rates and terms ;; After 6 years|Most issues drop off your credit file entirely and no longer need to be declared]]
Real examples of how this has worked out
Every situation is different, and the only way to know your realistic options is to have your circumstances assessed properly. These are real, recent examples of how adverse credit has been successfully worked through for clients with genuinely varied situations - tap a card to read the full story.
[[casestudies: Chris, Eastbourne|£840 in old defaults, settled 3 years ago - still accepted by a high street lender.|Chris wanted to buy his first home for £380,000 with a 10% deposit. He had £840 worth of defaults from 4 years ago, settled 3 years ago.|We knew that the individual defaults were small and had since been repaid in full. We applied our knowledge to find Chris the best lender possible.|We secured a mortgage offer for Chris with NatWest at 4.89% interest. ;; Angela, Brighton|£9,000 of defaults and missed card payments - still found the right lender.|Angela was buying for £375,000 with a 15% deposit. She had £9,000 of defaults registered 2 years ago, paid off 4 months ago, plus 7 missed credit card payments in the last 12 months.|Most of the defaults were with utility providers, and we know which lenders disregard utility defaults. We researched the best lender for Angela's circumstances.|We secured a mortgage offer for Angela with Bluestone at 6.59% interest. ;; Tom, Eastbourne|An IVA satisfied 3 years ago - didn't limit his options like he expected.|Tom wanted to buy the property he currently rents from his landlord for £340,000. He had an IVA registered 5 years ago, which was satisfied in full 3 years ago.|Due to the historic IVA, we researched Tom's best options. As this had been satisfied for over 3 years, it opened up many more lenders to him.|We obtained a mortgage offer for Tom with Metro Bank at 5.89% interest.]]
High street banks, near-prime lenders and specialist lenders
Not every lender treats adverse credit the same way, and knowing which tier you're likely to fit into saves a lot of wasted applications.
[[lenders: High street banks|Generally the strictest on credit history, though as Chris's example above shows, mild or well-resolved issues can sometimes still be accepted here ;; Near-prime lenders|Sit between high street and specialist, often a good fit for older or smaller credit issues that are fully resolved ;; Specialist adverse credit lenders|Built specifically to assess the full picture around a credit event, rather than declining automatically]]
Quanstrom Financial is a whole-of-market broker, which means we can assess your situation against all three tiers in one conversation, rather than you having to approach each lender individually and collect declines along the way. Your credit history is only one part of the picture too - it sits alongside your wider credit score and your income, which you can explore with our borrowing calculator.
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Steps you can take to improve your chances
There's a genuine, practical path you can follow before you apply, whatever stage you're at.
[[steps: Check your credit report|Get a clear picture of what's actually on file before you apply, using one of the main credit reference agencies ;; Settle what you can|Clearing an outstanding CCJ or default, where possible, is one of the biggest single improvements you can make ;; Avoid new credit in the run-up|New credit applications and new debt can count against you even if they're unrelated to the original issue ;; Build a clean track record|Time with no further issues is one of the strongest signals to a lender, alongside your original credit event ;; Save toward a larger deposit|A bigger deposit widens the pool of lenders who'll consider you and can improve the rate on offer ;; Speak to a mortgage broker at Quanstrom Financial|Rather than approaching lenders one at a time and collecting declines, we can match your situation to the right lender first time]]
What about buy to let mortgages with adverse credit?
Buy to let lenders tend to be more cautious around adverse credit than residential lenders, and are more likely to want a longer gap since the issue and a larger deposit. It's rarely a dead end, but the realistic pool of lenders is usually smaller than for a residential purchase, so getting specialist advice before you commit to a purchase is particularly worthwhile here.
Adverse credit and buying on a visa
If you're on a visa and also have a CCJ, default or other credit issue in your past, it can feel like you're facing two separate obstacles rather than one. In practice, a lender looks at your credit history and your immigration status as two distinct parts of the application, and a mild or well-resolved credit issue doesn't automatically become a bigger problem because you're also on a visa.
Good to know: Visa status generally affects things like your minimum deposit and maximum loan-to-value, while your credit history affects which lenders will consider you at all. The two factors are usually assessed separately rather than compounding each other, which is why it's worth having your full circumstances reviewed rather than assuming the combination rules you out.
Specialist and near-prime lenders that consider adverse credit generally still work within their own visa and right-to-work criteria, so the realistic pool of lenders can be narrower than for a UK national with the same credit history. A mortgage broker at Quanstrom Financial can assess both sides of your situation together, rather than you having to research visa-friendly lenders and adverse-credit-friendly lenders separately. For the visa side of your application specifically, see our Skilled Worker visa mortgage guide.
Who is this guide best suited to?
This guide is aimed at anyone with a CCJ, default, missed payment, debt management plan, IVA, bankruptcy or repossession in their past who assumes it rules out a mortgage completely. As Chris, Angela and Tom's examples show, the reality is often far more workable than it first appears, and a mortgage broker at Quanstrom Financial who knows this market can help you find the route that actually works for your circumstances rather than the one a search engine suggests.
Want to see how a mortgage might look once you've factored in your income? Try the calculator below.
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Frequently asked questions
Can I get a mortgage with a CCJ?
In many cases, yes. Whether it's realistic depends on whether the CCJ is settled or outstanding, how long ago it was issued, how large it was, and the deposit you have available. Specialist lenders are generally more flexible here than high street banks.
Can I get a mortgage with a default?
Often, yes, particularly once the default is settled and some time has passed. A default on an existing mortgage is generally viewed more seriously by lenders than a default on a smaller consumer credit product.
Can I get a mortgage while I'm still in an IVA?
Some specialist lenders will consider an application during an active IVA, though many prefer to wait until it's been completed. A larger deposit and a clean payment record within the IVA both help your case.
How long do I need to wait after bankruptcy to get a mortgage?
This depends on the lender, but most want to see that the bankruptcy has been formally discharged, with specialist lenders generally more willing to consider an application sooner after discharge than high street banks.
Will a debt management plan stop me getting a mortgage?
Not necessarily, though most lenders prefer to see a debt management plan fully repaid, or at least well established with a clean payment record, before considering an application.
How much deposit do I need with adverse credit?
This varies significantly depending on the type, size, recency and status of the issue, but a larger deposit than you'd need for a standard mortgage is common, and generally opens up more lenders and better terms.
Will applying for a mortgage with bad credit affect my credit score?
A full mortgage application involves a hard credit search, which can have a small, temporary impact on your credit score. A mortgage broker at Quanstrom Financial can often assess your realistic options using a soft search first, before any hard search takes place.
Are there extra costs with an adverse credit mortgage?
Adverse credit mortgages can carry higher interest rates and sometimes higher arrangement fees than standard deals, reflecting the increased risk to the lender. Our own advice fees vary depending on your circumstances - we'll explain any costs clearly before you proceed.
Can I get a buy to let mortgage with a poor credit history?
It's possible, though buy to let lenders tend to be more cautious than residential lenders around adverse credit, often wanting a longer gap since the issue and a larger deposit.
Can I get a mortgage with adverse credit on a new build?
Yes, though new build lending already tends to come with its own tighter deposit and valuation requirements, so adding a credit issue into the mix usually narrows the realistic lender pool further. A mortgage broker at Quanstrom Financial can identify which lenders are comfortable with both your credit history and a new build purchase at the same time, rather than you finding a new-build-friendly lender only to be declined on credit, or vice versa.
Written by Toby Quanstrom CeMAP, Director at Quanstrom Financial, a whole-of-market mortgage broker based in Eastbourne, East Sussex, with access to specialist lenders across the adverse credit market.
This article is for information purposes only and does not constitute financial advice. Lending criteria for adverse credit varies significantly by lender and can change, so always check your specific circumstances with your adviser before making a decision.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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