A couple hanging a picture in their new home.

The guide to securing a mortgage with a poor credit score

Published: February 7, 2025 by Jennifer Armstrong

Finding a mortgage with a poor credit score may seem like an uphill battle, but it isn’t impossible. If you’re an aspiring homeowner but are worried about how your credit report could affect your chances, read on to discover some of the steps that might help.

1. Save a larger deposit

As lenders will view you as more of a risk, saving a larger deposit could be one way to offset some of the concerns they might have about approving your mortgage application.

A larger deposit suggests you’re acting financially responsible. It also means the mortgage debt compared to the value of the property, known as the “loan-to-value (LTV) ratio” will be lower, which reduces the lender’s risk.

Traditionally, first-time buyers have put down a 10% deposit on a property they want to buy. However, if your credit report is poor, strive to save 20% or more. While this can be challenging, it could significantly boost your chances of your mortgage application being approved.

2. Be prepared to pay a higher interest rate

Again, the risk you pose to lenders is likely to affect the interest rate you’re offered if a lender does approve your application.

Preparing for this and ensuring you can keep up with mortgage repayments is important.

A mortgage in principle could give you an idea of how much you may be able to borrow and the repayments. However, keep in mind, that lenders don’t carry out a hard credit check when reviewing a mortgage in principle and it’s not a guarantee. As a mortgage adviser, we could help you apply for a mortgage in principle.

While a higher interest rate might be discouraging, if you keep up with mortgage repayments, your credit score may improve and your LTV will fall. So, when your first mortgage deal runs out, you might secure a more competitive deal that reduces your repayments.

3. Demonstrate to lenders you can meet repayments

Lenders want to know that you’ll be able to keep up with your mortgage payments. One of the best ways to demonstrate this is by showing your financial stability, which might be more closely scrutinised if you have a poor credit score.

You’ll usually need to send your last three payslips to prove your income. If you have guaranteed overtime or receive bonuses, you may also want to provide evidence of this.

There may also be an opportunity to show that you’re responsibly managing your finances, such as demonstrating regular payments on existing debt.

4. Review your credit report and remove inaccuracies

Before applying for a mortgage, take the time to review your credit report. Errors or inaccuracies in your report could affect the outcome of a mortgage application.

Check for mistakes, such as incorrect information about missed payments or loans that have already been paid off.

You might also spot potential red flags you hadn’t been aware of. In some cases, there might be steps you can take to remove them. For example, if you’re not registered on the electoral roll, doing so could provide a boost.

Changes to your credit report can take several months to show up, so it’s a good idea to take this step as soon as possible.

5. Think about the timing of your application

Timing could be important when applying for a mortgage. In some cases, delaying your home-buying plans by just a few months could make all the difference.

For instance, missed payments are usually removed from your credit report after seven years. So, if you’re nearing this point, you may choose to wait until it’s passed. Similarly, County Court Judgements are normally removed after six years.

6. Consider specialist lenders

A high street lender might have stricter credit requirements than specialist alternatives, some of which focus on providing mortgages to people with poor credit scores.

Approaching a lender that’s right for you could help you secure the loan you need to buy your home. You may not be aware of some specialist lenders that could suit your needs, as a mortgage adviser we could offer support and identify those that are more likely to accept your application.

However, bear in mind, that specialist lenders may charge a higher rate of interest or fees than traditional banks.

7. Work with a mortgage adviser

Securing a mortgage can be complicated and you might not know how to approach finding a lender if your credit score is poor. We’re here to help you navigate the mortgage market, identify a lender that’s right for you, and support you throughout the application process.

If you’d like to find out more about working with us, please get in touch.

Please note:

This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.


Share: