Can I get a mortgage with a fair credit score?
A poor credit rating can be a major barrier to getting a mortgage, but there are lenders prepared to help those whose applications may be refused elsewhere. Our guide explains more.
Key takeaways
Lenders scrutinise your financial history, including credit reports, defaults (link to default guide)
County Court Judgments (CCJs), and bankruptcy proceedings, before deciding whether to offer you a
Lenders also examine your pay slips, bank statements, and other debts to decide whether you’ll be able to afford repayments.
Bad credit mortgages also known as ‘sub-prime’ or ‘adverse credit’ mortgages, come with higher interest rates and larger deposit requirements.
A fair credit score can still secure a mortgage, but you are unlikely to receive the best rates.
It might not seem fair, but even having a big deposit in place and a decent salary isn’t enough to guarantee you a mortgage. If you have a bad credit score, you might be declined for a mainstream mortgage (link to mortgage decline guide), but you may be eligible for an adverse credit mortgage.
Can you get a mortgage with a bad credit score?
Yes, you can get a mortgage with a bad credit score, but it usually comes with higher interest rates and stricter terms.
Lenders typically view low credit scores as higher risk, which can lead to higher interest rates, larger deposit requirements, and stricter loan terms.
Lenders will look closely at your credit history, including missed payments, defaults (link to default guide), County Court Judgments (CCJs), IVAs (link to IVA guide) or bankruptcy, and this can affect both approval and the interest rate offered.
You may need a larger deposit, often 15% or more, and you’re likely to pay a higher rate than someone with a strong credit profile.
Some specialist lenders focus on applicants with adverse credit, and a mortgage broker can help find suitable deals.
What lenders consider for a mortgage
Your credit report
This document is a comprehensive record of your credit history and behaviour.
County Court Judgments (CCJs)
A CCJ (County Court Judgment) is a court order in England and Wales that is issued when someone fails to repay money they owe and the creditor takes legal action.
Any bankruptcy proceedings
Bankruptcy is a formal legal process where a person who cannot repay their debts applies – or is forced – to be declared insolvent. Filing for bankruptcy is a significant financial event that will impact your creditworthiness.
If your financial history includes bad credit, CCJs or bankruptcy, securing a mortgage can be more difficult. It's not just about whether you'll qualify for mortgage deals; it's also about the terms of those deals too.
Even if your financial issues occurred years ago, they could still lead to higher interest rates on any loans you're offered.
What mortgages can you get with a bad credit score?
If you have a bad credit score you may be able to get an adverse-credit mortgage or a near-prime mortgage.
Specialist/adverse-credit mortgages are offered by lenders which focus on people with past credit issues (defaults, CCJs, IVAs or bankruptcy) and assess your overall financial situation rather than just your credit score. They usually require a larger deposit and charge higher interest rates compared with standard deals.
Near-prime mortgages sit between mainstream and specialist products and are for people whose credit history has some blemishes but isn’t severely poor. They still offer more flexible criteria than high-street prime deals.
Some mainstream lenders will still consider applications with minor or historic credit issues, especially if the problems are old or small in value.
Is a mortgage possible with a fair credit score?
Yes, getting a mortgage with a fair credit score is definitely possible.
A fair credit score is a middle ground, signalling to lenders that you've generally managed your finances well but have had some past issues with payments.
While lenders may still view you as a risk, a fair credit score doesn't mean an automatic mortgage rejection. With a fair credit score, you might not get the most competitive rates, but you can still usually find mortgage lenders which will offer you a deal.
Why should you check your credit history?
You should check your credit history to understand how lenders see you and to spot any errors or signs of fraud before applying for credit.
You can view your credit report for free with MoneySuperMarket.
Sometimes, even simple oversights, such as not being registered on the electoral roll or neglecting to close unused credit card accounts, can drag down your credit rating.
What else do mortgage lenders need to know?
Mortgage lenders look at more than just your credit score. They’ll also want to know:
Your income: salary, bonuses, self-employed earnings, or other regular income to assess affordability.
Your employment status: whether you’re employed, self-employed, on a contract, or probation.
Your outgoings: monthly bills, personal loans, credit cards, childcare, and general living costs.
Your deposit: how much you’ve saved and where it’s coming from (e.g. savings or a family gift).
Your financial history: any missed payments, defaults, CCJs, IVAs, or bankruptcy.
The property details: value, type, and condition of the home you want to buy.
All of this helps the lender decide whether the mortgage is affordable and how much it is willing to lend you.
How does a good credit score benefit you?
A good credit score benefits you by making it easier to borrow money and access the best financial products. Lenders see you as lower risk, which means you’re more likely to be approved for mortgages, loans, and credit cards – and usually at lower interest rates.
Essentially, a good credit score can save you money and provide more options when it comes to choosing your home loan – and other financial products too.
Getting a mortgage with an excellent credit score versus a bad credit score
With an excellent credit score, you can usually access the best mortgage rates, smaller deposits, and flexible terms. With a bad credit score, options are limited, deposits are larger, and interest rates are higher, making borrowing more expensive and harder to secure.
Here's a comparison illustrating how an excellent versus a poor credit score could impact your mortgage options:
Mortgage rates on a property priced at £300,000
1. Excellent credit score
Deposit: 10% (£30,000)
Loan-to-Value (LTV): 90%
Interest rate: Approximately 3.99% (fixed for 2 years)
Monthly repayments: Around £1,267
With an excellent credit score lenders are more likely to offer favourable terms, including lower interest rates and higher LTV ratios. This means you can secure a mortgage with a smaller deposit and benefit from lower monthly repayments.
2. Poor credit score
Deposit: 20% (£60,000)
Loan-to-Value (LTV): 80%
Interest rate: Approximately 6.84% (fixed for 2 years)
Monthly repayments: Around £1,896
With a poor credit score lenders may require a larger deposit to mitigate the risk, leading to a lower LTV ratio. Additionally, higher interest rates increase your monthly repayments, making the mortgage more expensive over time.
Please note that these figures are illustrative and actual rates may vary based on individual circumstances and market conditions.
How can I improve my credit score?
A good credit score can help you get better deals on loans, mortgages, and credit cards – there are several ways you can improve your credit score.
Ways to improve your credit score
Check your credit report
Look for errors and correct any mistakes that could be bringing your score down.
Pay your bills on time
Late or missed payments can have a big impact on your score.
Keep your credit utilisation low
Try not to use more than 30% of your available credit limit.
Avoid multiple credit applications
Too many applications in a short time can make lenders think you’re struggling financially.
Register on the electoral roll
This helps lenders verify your identity and boosts your creditworthiness.
Consider a credit builder card
If you have little or no credit history, using one responsibly can help improve your score.
Manage old accounts wisely
Closing unused accounts may help, but keeping long-standing ones open can also show a strong credit history.
For more tips, our guide on how to improve your credit score can help.
Personal Finance Expert
Our expert says...
“For most of us, a mortgage is likely to be the biggest creditapplication we ever make – and because the home loan will run for years, getting the best deal possible is critical. This is why it’s so important to make sure your credit score is as high as it can be before applying. The good news? There are straightforward steps you can take to improve your credit rating. So, don’t delay, get started today.”
Why compare mortgage options with MoneySuperMarket?
Using a mortgage comparison tool can help you get a good idea of the kind of mortgage deals available. When you enter your information into MoneySuperMarket’s mortgage comparison tool, you’ll be able to compare example mortgage quotes from different providers.
Just tell us a bit about yourself, your financial situation, and your plans. We’ll help you scour the market in search of the mortgage deal that is right for your pockets and requirements. Then, feel free to use our mortgage calculators to find out how much each deal would cost you overall.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Author
Ashton Berkhauer
General Manager • Commercial
Currently the General Manager for Home Services and Mortgages, Ashton observes the markets and, along with his team, strives to get the best possible solutions for consumers. The products within his...
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Alan Cairns
Senior Content Editor
Alan helps MoneySuperMarket break down complicated financial topics into plain English, to help you find the right deals. When he’s not writing or editing you might find him cycling the South Downs.
