A less-than-perfect credit history does not automatically mean you cannot get a mortgage. It is one of several factors a lender considers, and its impact depends a great deal on the detail.
What counts as adverse credit?
Adverse credit is a broad term covering a range of entries on your credit file, including:
- Late or missed payments
- Defaults
- County Court Judgments (CCJs)
- Individual Voluntary Arrangements (IVAs) and debt management plans
- Bankruptcy
- Repossession
What lenders take into account
Lenders rarely treat adverse credit as a single yes-or-no test. The factors that tend to matter include:
- The type of issue — for example, a missed payment is generally viewed differently from a bankruptcy.
- The amount involved.
- How recently it happened, and whether it has since been satisfied or settled.
- Whether it forms a pattern or was a one-off.
- Your wider circumstances, including deposit, income, and current conduct of accounts.
What it may mean for your options
Depending on the circumstances, adverse credit may reduce the number of lenders willing to consider an application, however some lenders specialise in exactly these cases. It may also affect the deposit required or the interest rate terms offered.
What is available will depend on your individual circumstances and each lender’s criteria, so it is not possible to say in advance what any particular application would achieve.
Checking your credit file
If you have any concerns, it may be worth reviewing your credit file alongside your mortgage adviser, before applying. In the UK, information is held by more than one credit reference agency — lenders may use different providers, and the records they hold can differ.
Get Professional Advice
Choosing a mortgage when you have adverse credit can feel daunting, but you don’t have to do it alone. Speaking with a mortgage advisor can help you understand your options and find a product that fits your budget and long-term plans.
At Morrow, we have expert mortgage advisors who are here to help and find the best solution for you, we work with lenders and providers across the whole market, so we can compare a wide range of products and help you make an informed decision with confidence.
Your home may be repossessed if you do not keep up repayments on your mortgage.
