It’s possible to remortgage with bad credit, but approval depends on how severe your credit issues are. The more complex your history, the fewer lenders available.
Choosing the right lender is crucial, as each one assesses credit differently and there’s no universal score that guarantees acceptance. If you have a less-than-perfect credit history, specialist or subprime lenders may offer the most flexible options.
A mortgage broker, especially those with experience in helping to source bad credit mortgages, might be able to help you access deals from specialist lenders, as many won’t be available online or on the high street.
Remortgage rates are typically higher if you have poor credit. Lenders price rates based on risk, so the more serious your credit issues, the more you’re likely to pay. Specialist lenders rarely publish set bad credit rates because they assess each case individually, meaning your offer will depend on your specific financial situation.
Not all credit problems impact rates equally. For example, having little or no credit history may raise your rate slightly, while more severe issues like a CCJ or IVA can lead to much higher pricing.
Your level of equity also plays a key role - the lower your equity, the fewer competitive deals you’ll qualify for. If you have both adverse credit and low equity, securing a suitable remortgage deal can be challenging.
A bad credit score refers to the numerical value held by each of the credit reference agencies, which they base mostly on your credit performance, i.e, how well you’ve repaid your borrowed finance over the years.
The actual number of your score is not something to get hung up on, however, as each credit reference agency uses a different scoring system. So what’s considered high by one may be medium or low by another.
When mortgage lenders assess your credit, they aren’t really looking at numbers, but more at a wider credit picture. How responsible you are as a borrower is what really matters, as they want to be certain that you will repay your mortgage.
They will also be looking at:
The level of debt you have
How many repayments you’ve missed or made late
Whether you’ve satisfied (repaid) any credit issue and how long ago they occurred
As with most questions related to getting a mortgage or remortgaging, it really depends on your circumstances. Generally speaking, the more severe and more recent your credit issues are, the more difficult it will be. The level of equity you have will also play a role in this.
If you had a CCJ three years ago that is now satisfied, however, there’s a high chance that you will find it just as easy as someone with a perfect credit history to remortgage.
There are a few specialist lenders that use other methods of assessing your creditworthiness than the standard credit record checks, however, you will need to access them through a mortgage broker as they are not always directly accessible to the public.
The other option is to see if your current lender will offer you a product transfer, as they may not need to check your credit history in order to do so.
Yes, absolutely. If you have bad credit, it’s likely to be much easier to remortgage simply to tie in a better deal than you currently have, rather than to borrow more for home improvements, for example.
It’s also worth bearing in mind that some lenders will consider why you have poor credit. Many are more sympathetic to debt that’s being acquired through negative life events, such as ill health, than someone who has simply been careless with credit card borrowing.
As with most questions related to getting a mortgage or remortgaging, it really depends on your circumstances. Generally speaking, the more severe and more recent your credit issues are, the more difficult it will be. The level of equity you have will also play a role in this.
If you had a CCJ three years ago that is now satisfied, however, there’s a high chance that you will find it just as easy as someone with a perfect credit history to remortgage.
There are a few specialist lenders that use other methods of assessing your creditworthiness than the standard credit record checks, however, you will need to access them through a mortgage broker as they are not always directly accessible to the public.
The other option is to see if your current lender will offer you a product transfer, as they may not need to check your credit history in order to do so.
Yes, absolutely. If you have bad credit, it’s likely to be much easier to remortgage simply to tie in a better deal than you currently have, rather than to borrow more for home improvements, for example.
It’s also worth bearing in mind that some lenders will consider why you have poor credit. Many are more sympathetic to debt that’s being acquired through negative life events, such as ill health, than someone who has simply been careless with credit card borrowing.
While bad credit lenders exist, severe or recent credit issues limit your options. Improving your credit score can boost your chances of being accepted. Start by checking your credit reports for free to understand what’s affecting your score — most lenders will review one or more of these reports, so it’s useful to know your position before speaking to a broker.
Once you’ve reviewed your report, these steps can help strengthen your credit and open up more lender options:
Register on the electoral roll at your current address
Use a credit-building card responsibly if your score is low due to limited credit history
Resolve any outstanding credit issues where possible
Pay all bills on time, including loans, credit cards and utilities
Stay within credit limits and avoid using over 50% of your available credit
Update addresses on all accounts and close any you no longer use
Correct any errors on your credit file across all credit reference agencies
Remove old financial links (e.g., ex-partners) by asking agencies to delete outdated associations or closing joint accounts
Even if you have adverse credit, so long as you’ve never missed or been late with a mortgage payment, your existing lender may let you switch to a better deal from their range.
Most lenders won’t do an additional credit search for a product transfer, so your credit history won’t necessarily hold you back here.
Bad credit won’t follow you forever, so long as you change the behaviours that caused it. Your credit history is only held for six years, so even a bankruptcy that happened in more distant history shouldn’t be visible to lenders once six years has passed since it was discharged.
The less severe the credit issue, the sooner lenders may be willing to overlook it, or adjust their interest rates to accommodate you. For example, there are even some high street lenders that will begin to look at borrowers with CCJs older than two years.
Even if you have adverse credit, so long as you’ve never missed or been late with a mortgage payment, your existing lender may let you switch to a better deal from their range.
Most lenders won’t do an additional credit search for a product transfer, so your credit history won’t necessarily hold you back here.
Bad credit won’t follow you forever, so long as you change the behaviours that caused it. Your credit history is only held for six years, so even a bankruptcy that happened in more distant history shouldn’t be visible to lenders once six years has passed since it was discharged.
The less severe the credit issue, the sooner lenders may be willing to overlook it, or adjust their interest rates to accommodate you. For example, there are even some high street lenders that will begin to look at borrowers with CCJs older than two years.
As each credit reference agency uses a different scoring system, mortgage lenders are not looking for any particular baseline score for mortgage or remortgage acceptance.
Unless you have a very severe credit history, you will typically be able to remortgage with poor credit, it just means you will have less choice of lender and pay higher rates of interest.
No, you can’t, as the lender will consider you a more risky borrower on account of that bad credit.
The significance of the increase in mortgage rates won’t always be huge, however, especially if your bad credit is fairly minor. It’s always worth speaking to a mortgage broker for further advice.
It depends on your circumstances, such as how bad your credit is, and how much equity you have in your home.
It’s also important to seek advice about which lenders to choose, as multiple rejections from applying with the wrong type of lender for your circumstances will reduce your score even further.
If you have a joint mortgage and only one of you has poor credit, it will typically affect both of you, as people that own a home together are financially linked on their credit records.
That said, every lender has a different set of criteria to the next, so it won’t necessarily mean that you can’t find a remortgage deal to suit your needs. If either, or especially both of you have poor credit, it’s important to speak to a broker before selecting a lender.
It depends on how much equity you have, and how severe your bad credit is. It also depends how much you want to borrow, and why, as the purpose of the equity release can influence the lenders’ decision.
It will certainly be more difficult to find a lender willing to extend your borrowing than simply put you onto a more competitive deal, however, if you have substantial equity, it’s not out of the question.
This will depend on both the level of equity you have and how recent or severe your CCJ is. All lenders assess the risk of having a CCJ differently. Some will only consider you if they have been satisfied, some will only consider you after a certain amount of time has passed, and some will expect both a certain number of months or years to have passed and for the debt to be satisfied (repaid).
Generally speaking, the more equity you have and the further in the past your CCJ occurred, the less of an issue it will be to find a willing lender.
Use the links below to find out about other mortgages
