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17 tips for getting a mortgage with bad credit

How to improve the odds of being accepted

With a bad credit history, buying a home may seem like an impossible dream. But don’t despair. These tips can help you improve your chances of successfully applying for a mortgage.

Lenders will consider your credit worthiness before granting loan, so missed payments, outstanding debts or other defaults may knock you out of the running. Yet there are things you can do improve the odds of getting approved.

We round up the best tactics for improving your credit score, strengthening your application and finding the right lender.

  • For expert, impartial advice on finding the right mortgage, whatever your circumstances, call Which? Mortgage Advisers on 0800 2942 849.

Improving your credit score

1. Get a credit-builder credit card

A credit-builder card will let you establish a history of using credit responsibly, and you can apply even if your credit score is weak.

Just make sure you pay it off in full each month by the deadline, and avoid withdrawing cash or borrowing on this card.

Find out more: best credit cards for bad credit

2. Avoid opening new credit

Every time you apply for credit, it is recorded on your credit file. Your ‘credit score’ can often fall when you make an application, and repeated credit applications can look unfavourable to lenders.

So plan your applications for credit carefully. Avoid making ones that might be rejected, or repeated attempts in a short timeframe. Generally, you should leave six months between credit applications.

3. Register to vote

Lenders and credit reference agencies use the electoral roll to track your history, so registering to vote should be one of the first things you do each time you move.

Just being on the electoral roll can give your credit score a boost.


4. Clear up any errors

It’s important to check your credit reports from all three major credit reference agencies: Equifax, Experian and Call Credit.

You can now do this for free on many websites. Visit our guide to checking your credit score for free to find out how.

Sometimes errors can creep into your report, bringing down your score. If you find anything that seems amiss, contact the company involved as soon as possible.

5. Count your rental payments

Generally, your rental payments won’t influence your credit score, even if you have a long history of paying on time.

To make your rental payments count, you can register with Rental Exchange, a free scheme that collects your payments and passes the information to Experian.

Find out more: how to improve your credit score

6. End financial ties to ex-partners

If you live with or marry someone with a bad credit rating, yours will only be affected if you take out financial products together, for example, opening a joint bank account.

Once you’ve done this, you create a ‘financial association’, meaning lenders may look at that person’s credit history as well as yours.

So if you move out, or the relationship ends, make sure you ask all three credit reference agencies to sever this financial association on your record.

7. Pay on time, dispute later

Defaults can drag down your credit score, and lenders may be reluctant to approve someone who has missed payments in the past, even for something as simple as an electricity bill.

For this reason, if you’re in a dispute with a provider, it’s best to continue paying in full and on time until the issue is resolved.

8. Prioritise mortgage payments

Lenders may be willing to overlook a missed phone bill or late credit card payment, but most will reject an applicant with missed mortgage payments on their record.

If you already own a home, but are struggling to make ends meet, put a priority on paying down your mortgage – even just in part – and contact your lender to discuss your options as soon as possible.

Find out more: why do I have a bad credit score?

9. Be wary of debt management plans

A debt management plan is an agreement with a creditor to repay a limited amount of your debt each month. This can help bring your debts under control, and may be critical to helping your climb out of the hole.

But lenders tend to view debt management plans in a highly negative light, as you’re effectively defaulting every month, so treat this option as a last resort.

Strengthening your application

10. Bide your time

The more recent your negative credit history, the more cautious a lender is likely to be. For missed payments, lenders will want to see at least two years of on-time repayments and good credit management before you apply.

For more serious blights on your credit history – such as a County Court Judgment for unpaid bills – you may have to wait up to three years or more, though it may depend on the amount outstanding.

Bankruptcies are considered most serious, and even specialist lenders are likely to expect you to wait at least six years after one has been discharged.

11. Provide an explanation

Lenders may be more understanding if you can offer an explanation for your financial difficulties, for example, you were going through a divorce, were laid off or were facing an illness.

It’s worth gathering documentation that backs up your story and provides helpful context to add to your application.

12. Borrow less at a lower LTV

Lenders are looking to minimise their risk, so if your history raises concerns, you need to find other ways to seem like a low-risk applicant.

One option is to borrow a lower amount than you would otherwise, so that your income ratio is higher. Alternatively, it can be worth trying to put down a larger deposit (say 20% or more) so you can offer more security.

Find out more: improving your mortgage chances

13. Consider your partner’s situation

When you buy together with a partner, the lender will consider their financial situation as well, which can be a boon if their credit rating is stronger than yours.

You could also consider a joint mortgage with a family member if you need to boost your application.

Just keep in mind that they’ll own a share of the property, and that there may be implications for first-time buyer entitlements if one of you has owned before.

14. Try adding a guarantor

With a guarantor mortgage, your family member offers their own home as security against the loan.

Adding a guarantor to your mortgage may give the lender more confidence in your application, and improve your chances of being accepted.

But the stakes are high for both you and your family member, so be very sure you can continue repaying your loan, now and into the future.

Finding the right lender

15. Consider a specialist lender

There are a number of lenders on the market that specialise in applications from people with bad credit. While the interest is likely to be higher, your chances of being accepted are much greater.

Our guide to bad credit mortgages sets out which lenders accept different types of default, CCJs, bankruptcies and other black marks on your history.

If you faced unusual circumstances or want to offer an explanation, it’s also worth seeking out banks that offer manual under-writing – meaning your application is assessed by a person, rather than a computer.

16. Work out which credit report your lender uses

Due to the nature of credit reporting, your score could be excellent with one credit reference agency and poor with another.

Many lenders will only seek reports from one of the three agencies. So if you look great in a particular agency’s report, find a lender that uses that one.

Remember, though, that each lender has its own credit scoring system. So the scores you see from the credit reference agencies only give you an indication of your credit health, not the complete picture.

17. Talk to a mortgage broker

Brokers help people find mortgage deals that suit their circumstances. A good broker will know which lenders are likely to accept your application and how you can strengthen your chances.

For expert, impartial advice, you can request a free callback from Which? Mortgage Advisers below, or call on 0800 2942 849.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.

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