Last reviewed: June 2026
TL;DR- Adverse credit - including defaults, CCJs, missed payments, IVAs and bankruptcies - does not automatically prevent getting a mortgage, but significantly restricts lender choice.
- Specialist adverse credit lenders assess applications case by case, considering the severity, age and context of the credit issues.
- Rates on adverse credit mortgages are higher than standard market rates to reflect the additional risk to the lender.
- Improving credit before applying - reducing debt, correcting errors on the credit file, allowing time to pass since adverse events - increases lender choice and reduces rates.
What Counts as Adverse Credit?
Adverse credit - also called bad credit or a poor credit history - covers a range of negative credit events that appear on a borrower's credit file and signal elevated risk to lenders. Common forms of adverse credit include: missed or late mortgage or loan payments; defaults (formal records of failure to repay a debt); county court judgments (CCJs) for unpaid debts; individual voluntary arrangements (IVAs); debt management plans; and bankruptcy. The severity, recency and resolution status of each of these events affects how lenders assess the application.
Credit reference agencies - Experian, Equifax and TransUnion - hold records of most credit events for six years from the date they were registered. An adverse event registered five years ago will still appear on the credit file but carries significantly less weight than one registered six months ago.
How Specialist Lenders Assess Adverse Credit
Mainstream high street lenders typically decline applications where adverse credit is present and rely on automated credit scoring that flags adverse events. Specialist adverse credit lenders assess applications manually, considering:
- The nature of the adverse event: a single missed payment is assessed differently from a bankruptcy or IVA.
- The age of the event: older events carry less weight; some lenders have minimum time requirements since adverse events (for example, no defaults in the last 24 months).
- Whether the debt has been satisfied: a satisfied default is treated more favourably than an unsatisfied one.
- The context and reason: a default arising from a one-off medical event or relationship breakdown may be viewed differently from a pattern of financial mismanagement.
- The overall credit profile: income stability, deposit size, employment status and the rest of the credit history all contribute to the overall picture.
Deposit Requirements for Adverse Credit Mortgages
Specialist adverse credit lenders typically require larger deposits than mainstream lenders, reflecting the higher risk. A borrower with recent significant adverse credit may be required to have a deposit of 15-25% or more, giving an LTV of 75-85%. The minimum deposit required varies by the severity and recency of the adverse events and by lender. More serious or recent adverse credit issues require larger deposits; older or more minor issues may qualify for lower deposit requirements.
Rates on Adverse Credit Mortgages
Interest rates on adverse credit mortgages are higher than standard market rates. The premium reflects the additional risk the lender accepts in lending to a borrower with adverse credit. The rate differential varies with the severity of the adverse credit and the deposit size. As adverse events age and the borrower's credit position improves, remortgaging to a lower-rate product typically becomes possible.
Steps to Improve Credit Before Applying
Borrowers with adverse credit who are not yet ready to apply for a mortgage may be able to improve their position by: checking their credit file with all three major credit reference agencies and correcting any errors; ensuring all existing debts are paid on time; reducing outstanding credit balances; allowing time to pass since adverse events; avoiding further credit applications in the short term; and registering on the electoral roll at their current address. Building a pattern of financial stability over 12-24 months can materially improve lender options.
Frequently Asked Questions
How long does adverse credit stay on a credit file?
Most adverse credit events - defaults, CCJs, missed payments, IVAs - remain on the credit file for six years from the date they were registered. Bankruptcy is also recorded for six years from the date of discharge (which typically occurs one year after the bankruptcy order). After six years, these events are automatically removed from the credit file.
Can I get a mortgage with a CCJ?
Yes, in some cases. Specialist lenders consider CCJ applications on a case-by-case basis. The key factors are the amount of the CCJ, whether it has been satisfied (paid), and how long ago it was registered. A small, satisfied CCJ registered several years ago is assessed very differently from a large, unsatisfied CCJ registered recently. A specialist mortgage broker with adverse credit experience is the best guide to lender eligibility for specific circumstances.
Is a mortgage broker necessary for adverse credit applications?
A whole-of-market mortgage broker with specialist adverse credit experience is strongly advisable. Mainstream lenders decline adverse credit applications through automated systems. A specialist broker knows which lenders consider adverse credit applications, what their specific criteria are, and how to present the application most effectively. Making multiple direct applications to lenders - each of which leaves a hard search on the credit file - can further damage the credit score and reduce options.
Does a debt management plan prevent getting a mortgage?
An active debt management plan (DMP) is a significant adverse credit event and most lenders will not consider an application while the DMP is active. Once the DMP is complete and all debts have been repaid, some specialist lenders will consider applications, depending on the time elapsed since completion and the rest of the credit profile.
