A patchy credit history is one of the most common reasons people are told they are unmortgageable. The good news is that a mark on your file rarely closes every door. High-street banks tend to work to strict, automated rules, while specialist lenders look at the detail of what happened and when.
This guide explains the main types of adverse credit, how long each one affects you, and the practical steps that improve your chances. It is information only, not financial advice, so use it to get your bearings and then speak to an FCA-authorised mortgage broker about your own situation.
What counts as adverse credit
Adverse credit is a broad term for anything on your file that suggests you have struggled to keep up with borrowing. Lenders treat some events as far more serious than others, and the age of each event changes how much it matters.
- Late or missed payments on credit cards, loans or utilities.
- Defaults, where a lender closed an account because payments stopped.
- County Court Judgments for unpaid debts.
- Individual Voluntary Arrangements, Debt Management Plans and bankruptcy.
- A high level of existing debt relative to your income.
How long problems stay on your file
Most adverse events stay on your credit file for six years from the date they happened, then drop off automatically. Bankruptcy, IVAs and CCJs also sit on public registers for a set period. The important point is that lenders care about how recent the event is. A default from five years ago, with a clean record since, is treated very differently from one last month.
How specialist lenders assess you
Specialist lenders are set up to consider cases the mainstream declines. Instead of a simple pass or fail, they look at the story: what caused the problem, whether it was a one-off such as an illness or job loss, and how you have managed money since. They will usually want to see that recent months are clean.
Lenders such as Pepper Money, Kensington and Precise are examples of firms that consider adverse credit. Naming them here is educational only, and any lender or broker should be checked on the Financial Conduct Authority Register before you deal with them.
Steps that improve your chances
You cannot erase accurate history, but you can present a stronger case and avoid common mistakes.
- Check all three credit reference agencies and correct any errors.
- Register on the electoral roll at your current address.
- Keep every payment on time for as long as possible before applying.
- Avoid new credit applications in the months before a mortgage.
- Build a bigger deposit if you can, as it offsets lender risk.
Why a broker helps here
Adverse credit lending is a specialist field, and criteria change often. A broker who knows this market can match your exact situation to a lender likely to say yes, which avoids wasted applications that leave a footprint on your file. If a broker charges a fee, ask what it is and what you get for it before you commit.
Common questions
Can I get a mortgage with a default?
Often yes, particularly if the default is a year or more old, is not for a large amount, and your recent record is clean. A larger deposit helps, and a specialist lender is usually the right route.
Do I need to wait until my credit file is clear?
Not always. Many specialist lenders will consider you while marks are still showing, based on how recent and serious they are. Waiting can improve your rate, but it is not always necessary.
Will applying and being declined make things worse?
A declined application leaves a hard search on your file, and several in a short time can look like distress borrowing. This is why matching to the right lender first, often through a broker, matters.
Are adverse credit mortgage rates higher?
Usually yes. Specialist lenders price for the added risk, so expect a higher rate than the high street. Many borrowers move to a mainstream deal later once their record has recovered.
Does a low credit score mean I am unmortgageable?
No. There is no single score every lender uses, and each has its own criteria. A low number from one agency does not decide your application on its own.