Skip to content

Can I get a Mortgage with a Fair Credit Score?

Can I get a mortgage with my credit rating?

Ashton Berkhauer
Written by  Ashton Berkhauer
5 min read
Updated: 18 Mar 2024

A poor credit rating can be a major barrier to getting a mortgage. However, the good news is that there are lenders who are prepared to help those whose applications may be refused elsewhere. So, can I get a mortgage with a fair credit score? Read here to learn more.

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, then your application is likely to be refused.

Can you get a mortgage with a bad credit score?

The journey to homeownership can be fraught with challenges, especially when it comes to convincing lenders that you're a safe bet. Banks and building societies exercise extreme caution, meticulously combing through applicants' financial histories. They're particularly vigilant about past defaults on debt payments, which can be a red flag when deciding whether to extend a mortgage offer.

When lenders evaluate your application, they consider several key factors:

  • Your credit report: This document is a comprehensive record of your credit history and behaviour

  • County Court Judgments (CCJs): These indicate whether you've had any legal rulings against you for unpaid debts

  • Any bankruptcy proceedings: Filing for bankruptcy is a significant event that will undoubtedly impact your creditworthiness

If your financial history includes any of the above issues, securing a mortgage can become a steep uphill battle. It's not just about whether you'll qualify for mortgage deals; it's also about the terms of those deals. Even if your financial mishaps occurred years ago, they could still lead to higher interest rates on any loans you're offered.

terraced houses

What mortgages can you get with a bad credit score?

For those with a less-than-stellar credit history, there's a specific type of product known as 'sub-prime' or 'adverse credit' mortgages. These are tailored for individuals with poor credit records. Functionally, they're similar to standard mortgages, but they come with a catch: higher interest rates and heftier deposit requirements, which can range from 25% to 30%. These terms reflect the increased risk that lenders take on when dealing with applicants who have a history of financial instability.

Is a mortgage possible with a fair credit score?

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 find mortgage deals that are willing to accommodate your financial past.

Why should you check your credit history?

Before you dive into the mortgage application process, it's wise to take a step back and review your credit report. This can help you spot any potential issues that could hinder your chances of approval. You can obtain your credit report from major credit agencies like Experian, Equifax, or TransUnion. 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?

Beyond your credit history, mortgage lenders will dig into other aspects of your financial life. They'll request documentation like pay slips or, for self-employed individuals, three years of accounts and bank statements. They'll also want to know about other debts you may have, including personal loans or credit card balances. It's advantageous to reduce these debts before applying for a mortgage, as it demonstrates your commitment to financial responsibility. Remember, even late payments on utility bills can leave a blemish on your credit history.

How does a good credit score benefit you?

Achieving a good credit rating can be your golden ticket to a smooth mortgage approval process. With a solid credit score, you unlock the door to more favourable interest rates, the possibility of borrowing larger sums, and a broader selection of mortgage products. Essentially, a good credit score can save you money and provide more options when it comes to choosing your home.

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.

Ready to find a mortgage?
Compare mortgages