Understanding the problem
What counts as adverse credit?
Adverse credit (also called bad credit or poor credit) is a broad term covering a range of credit events that appear on your credit file and can affect your ability to borrow. Common examples include:
Missed Payments
Late or missed payments on credit cards, loans, or utilities. Even a single missed payment can affect your credit score, but recency and severity matter most to lenders.
Defaults
A default is registered when you fail to repay a debt as agreed. Defaults stay on your credit file for six years. Satisfied (paid) defaults are viewed more favourably than outstanding ones.
CCJs
County Court Judgements are serious credit events. Lenders treat CCJs cautiously, but some specialist lenders will consider applications if the CCJ is satisfied and time has passed.
IVAs
An Individual Voluntary Arrangement is a formal debt solution. Mortgages during an active IVA are very difficult to obtain, but options exist once you’re discharged with a clean period post IVA.
Bankruptcy
Most mainstream lenders won’t consider applicants discharged within the last six years. Specialist lenders may be accessible from discharge plus two or three years, depending on the circumstances.
Repossessions
A previous property repossession is a significant adverse event. Specialist lenders will look at the circumstances, how long ago it occurred, and your subsequent credit history.
The answer might surprise you
Can you get a mortgage with bad credit?
Yes, in many cases, yes. The answer depends on the type of adverse credit, how severe it was, how long ago it occurred, and whether it’s been resolved. What high street banks decline, specialist lenders often approach differently.
Specialist adverse credit lenders exist precisely because they understand that life events, redundancy, divorce, illness, a business failure, can temporarily affect finances. They assess the full picture of your circumstances, not just a credit score.
What lenders look at
How lenders assess adverse credit
Specialist lenders don’t just look at your credit score. They consider a range of factors when making a lending decision on an adverse credit case:
Recency and Severity
A missed payment two years ago is treated very differently from an active default or a recent CCJ. The older the adverse event and the smaller the amount, the less it typically impacts lender decisions.
Deposit Size
A larger deposit reduces lender risk. Many adverse credit lenders require 15%+ deposit; some require 25%+. The more equity you can put in, the better the products available to you.
Income Stability
A stable, evidenced income reassures lenders you can service the debt going forward. Self employed applicants with adverse credit need to demonstrate a particularly clear income history.
Time Since Event
Most adverse events carry less weight after three years; many become less significant after six. If you’re approaching a key date, it may be worth waiting to access better products.
Before you apply
Steps to improve your chances
Even if your credit history isn’t perfect, there are practical steps you can take before applying to maximise what’s available to you:
- Check your credit report on all three agencies (Experian, Equifax, TransUnion)
- Correct any errors on your credit file
- Register on the electoral roll at your current address
- Pay off (satisfy) any outstanding defaults or CCJs if possible
- Reduce credit card balances to below 30% of the limit
- Avoid multiple credit applications before applying for a mortgage
- Maintain a clean payment record for at least six months before applying
- Save as large a deposit as possible
Why choose us?
Why WAM? Access to specialist lenders
High street banks and building societies often reject adverse credit applications outright, without properly assessing your individual circumstances. We are not limited to those lenders. We work with specialist mortgage lenders, including those who are not available directly or through comparison sites, who are specifically set up to handle complex cases.
- Access to specialist adverse credit lenders
- Lenders not available on the high street
- Honest, realistic assessment from the start
- No impact on your credit score for initial advice
- Experienced in complex and declined cases
- Full application support from start to completion
