There are five further types of adverse credit that mortgage lenders consider — each assessed differently by type, age, value and whether resolved. Our dedicated guides cover each in full.
INDIVIDUAL VOLUNTARY ARRANGEMENTS
IVAs & Getting a Mortgage
An Individual Voluntary Arrangement (IVA) is a formal, legally binding agreement with creditors to repay a portion of debt over a set period — typically five years. An IVA appears on your credit file for six years from the date it was approved, meaning it may remain visible even after you have completed it.
During an active IVA you will need your Insolvency Practitioner’s consent before taking on any new credit. After completion, specialist lenders will consider applications — typically 1–3 years post-completion with a 20%+ deposit. Our dedicated IVA mortgage guide explains the full timeline and what to expect.
BANKRUPTCY
Mortgage After Bankruptcy: What’s Possible
Bankruptcy in England and Wales is typically discharged after 12 months (6 months in Scotland). No lender will consider a mortgage while you are an undischarged bankrupt. After discharge, specialist lenders may consider applications — but terms reflect the severity, with 25–30% deposits typically required in the early years.
The most important factors are time since discharge and your financial conduct since. As the discharge date ages and your credit rebuilds, more options open up. Bankruptcy drops off your credit file after six years. Our post-bankruptcy mortgage guide covers the full timeline and realistic expectations.
DEBT MANAGEMENT PLANS
DMPs & Mortgage Eligibility
A Debt Management Plan (DMP) is an informal arrangement to repay debts at a reduced rate, usually organised through a charity like StepChange. Unlike a formal IVA or bankruptcy, a DMP is not a single entry on your credit file — instead the creditors involved may register late payment markers or defaults separately.
The mortgage impact depends on what those underlying entries look like. Old, satisfied markers from a completed DMP can often be worked around. If the DMP is ongoing or recent adverse markers remain, options are more limited. We will always review your full credit file before assessing what is achievable.
PAYDAY LOANS
Why Payday Loans Affect Mortgage Applications
Payday loans do not register as defaults or CCJs — but many mortgage lenders treat them as a serious red flag. High-street lenders view payday loan usage as a sign of financial distress, regardless of whether repayments were made on time. Most mainstream lenders will decline automatically if payday loans appear on your bank statements within the last 12–24 months.
Specialist lenders are more flexible, but want to see that usage is historical — at least 12 to 24 months in the past — with stable finances since. If you have recently used a payday loan, speak to a specialist broker before making any application to any lender.
REPOSSESSIONS
Previous Repossession & Your Mortgage Chances
A repossession — where a lender reclaims a property due to sustained mortgage arrears — is one of the most serious adverse credit events. It typically results in a shortfall registered as a debt on your credit file, on top of the repossession entry itself, and stays visible for six years.
Most mainstream lenders will not consider applicants with a previous repossession. Specialist lenders may consider applications after 3–6 years of demonstrated financial stability and with a substantial deposit. Every case is assessed individually — our advisers will review your full history and give you an honest picture of what is achievable and when.
Frequently Asked Questions
Can I get a mortgage with bad credit in the UK?
Yes. Specialist lenders assess the full picture — type of issue, age, whether satisfied, and your current financial position. Many people with adverse credit histories do secure mortgage offers.
What counts as bad credit for a mortgage?
Missed payments, defaults, CCJs, IVAs, bankruptcy, debt management plans, payday loans and repossessions — any negative mark indicating past difficulty meeting credit obligations.
How long does bad credit stay on my file?
Most adverse credit markers remain for six years from the date registered. After six years they drop off automatically.
Do I need a larger deposit if I have bad credit?
Generally yes. For minor issues 10–15% may be sufficient; for more serious adverse credit, 20–30% is typically required.
Will a specialist mortgage broker help with bad credit?
A specialist broker has whole-of-market access, including lenders who do not deal with the public directly. They can match your profile to the right lender before any hard search is run.
