What Counts as “Bad Credit”?

“Bad credit” is a broad label covering a range of marks on your credit file, and lenders treat them very differently — a single late payment years ago is worlds apart from a recent bankruptcy. Common forms of adverse credit include:

• Missed or late payments — on credit cards, loans or bills. Minor and common, especially if isolated.
• Defaults — when an account is closed for non-payment. More serious, and their age matters a lot.
• County Court Judgments (CCJs) — a court ruling over an unpaid debt. Significant, but their impact fades with age and if satisfied.
• Individual Voluntary Arrangements (IVAs) and debt management plans — formal arrangements to repay debt.
• Bankruptcy — the most serious. Mortgages become possible again after discharge, usually with time and a larger deposit.
• Repossession — viewed seriously by lenders, though not necessarily permanent.

The single most important thing to understand: severity and recency drive everything. A default from four years ago that you’ve since cleared, against a spotless record ever since, is a very different proposition from a CCJ registered last month.

How Lenders Weigh Bad Credit

Mainstream high-street lenders tend to apply rigid credit-score cut-offs — which is why people with adverse credit often get an automatic “no” there, and assume the whole market is closed. It isn’t. Specialist (or “adverse credit”) lenders underwrite each case individually, looking at the story behind the marks rather than a single score. They weigh:

• How recent the issues are — older is much better; many lenders want to see clean months or years since the last event.
• How severe — a missed phone bill isn’t a bankruptcy.
• Whether it’s resolved — a satisfied CCJ or cleared default looks far better than an outstanding one.
• The pattern — a one-off tied to a life event (illness, job loss, divorce) reads better than ongoing mismanagement.
• Your recovery — evidence you’ve been managing money well since is powerful.

Because each specialist lender sets its own rules on which issues it will accept and how recent they can be, the right lender for your specific history is the whole game — and finding them is exactly what a specialist broker does. This mirrors how lender choice matters for the self-employed: the same application can get very different answers across lenders.

Deposit and Rates: What to Expect

Two things are usually true of a bad-credit mortgage, and it helps to expect them:

That last point matters most. Many people take a bad-credit mortgage knowing it’s a stepping stone: get on the ladder (or refinance) now, keep a clean record, then move to a mainstream rate at the next remortgage. Framed that way, a higher initial rate is the price of a fresh start, not a permanent penalty.

Improve Your Chances Before You Apply

A few weeks of preparation can genuinely change the outcome:

• Check your credit files across the main agencies (Experian, Equifax, TransUnion) — lenders use different ones, and errors are common. Dispute anything wrong.
• Register to vote at your current address — a simple, surprisingly effective boost to your file.
• Settle what you can — a satisfied default or CCJ looks far better than an outstanding one.
• Avoid new credit and hard searches in the run-up — including multiple mortgage applications, which leave marks. This is why getting advice before applying matters.
• Build a clean recent history — even a few months of on-time payments and stable finances strengthens your case.
• Save a bigger deposit — the most reliable single lever, as above.

Bad Credit and Your Situation

Adverse credit interacts with whatever else is true about your circumstances — and there’s usually a route:

• First-time buyer with bad credit? Possible with specialist lenders; everything in our first-time buyer guide still applies, just with a larger deposit and the right lender.
• Self-employed with bad credit? A tougher combination, but not a dead end — see self-employed mortgages; a broker who handles both is invaluable.
• Buy-to-let with bad credit? Specialist buy-to-let lenders do consider adverse credit, since the rent underpins the loan.
• Remortgaging with bad credit? If your credit slipped since you bought, a remortgage or product transfer may still be open to you — and staying with your current lender can be easier than switching.
• Need to borrow more despite credit issues? A second-charge mortgage is sometimes accessible where a remortgage isn’t, since it’s secured against your equity.
• Guarantor or family help can also strengthen a weak application — a route covered in our first-time buyer guide.

Whatever the deal type — fixed, variable or tracker, on a repayment basis — the credit question is separate from (and solved alongside) the usual choices.

Why a Specialist Broker Makes the Difference

Of every audience on this site, people with adverse credit gain the most from a broker — and it’s not a sales line, it’s structural. Specialist adverse-credit lenders often don’t deal with the public directly and can only be accessed through intermediaries. Their criteria — which marks they accept, how recent, how severe, what deposit — are intricate and unpublished. And a wrong direct application can add another hard-search mark to a file that can’t afford one.

A specialist broker knows which lender fits your exact history, presents your case in the best light (the story behind the marks matters), and gets you to apply once, to the right place. That protects your credit file and gives you the best genuine chance — without any promise of a particular outcome, because no honest adviser can guarantee approval.

Frequently Asked Questions