A missed or late payment occurs when you fail to meet a credit obligation on time, whether that's a credit card, personal loan, mobile phone contract or utility bill. One or two isolated missed payments are the least serious form of adverse credit, and many specialist lenders will still consider your application, particularly if the payments were more than 12 months ago and your file has been clean since.
A default is formally registered when a lender closes an account after sustained non-payment, typically after 3 to 6 missed payments. It remains on your credit file for six years from the date registered, regardless of whether you later repay the debt.
The distinction between a satisfied default (debt repaid) and an unsatisfied default (debt still outstanding) matters enormously to lenders. Satisfied defaults, particularly those over two years old, can be worked around by specialist lenders. Some, including Aldermore and Kensington, will consider defaults from as little as six months old depending on type, value and LTV.
We explain defaults fully on our dedicated defaults page. The short answer: a default does not automatically mean no mortgage; it means you need the right lender and a broker who knows where to look.
A County Court Judgement (CCJ) is issued when a creditor takes legal action to recover a debt and wins. It is registered on your credit file and the Register of Judgements, Orders and Fines for six years. Pay within one month and you can apply to have it removed entirely. Pay after one month and it is marked as satisfied, but remains on file.
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.
Whatever your credit history, our specialist advisers will give you an honest picture of what is achievable and when, and a clear plan to get you mortgage ready. A good first step is to check your credit file with CheckMyFile, which shows all three credit reference agencies in one report.
Dig deeper into your situation
Every type of credit issue on this page affects your mortgage options differently. To understand why, it helps to know how the credit reference agencies record them and what lenders actually look at.
There is no single credit score. Each of the three main credit reference agencies, Experian, Equifax and TransUnion, works out its own credit scores from your credit report, on different scales. Lenders do not see those scores. They see the data underneath and run their own scoring.
Your payment history is the biggest single factor in most credit scores. One late payment on a phone bill does far less damage than a run of arrears on a loan, and problems from last year count for much more than problems from five years ago.
Late payments, defaults, CCJs, IVAs and debt relief orders all stay on your credit reference file for six years from the date they were registered. Lenders care most about the last two to three years, so time on its own improves your options.
Using a high share of your credit limit, or only ever paying the minimum payment, can pull your credit scores down even with a clean payment record. Keeping card balances well below the limit, ideally under about 30%, is a sensible rule of thumb.
Lots of recent applications for unsecured loans or credit cards suggest you are borrowing money to get by. Each hard search stays visible on your credit report for a year, so space out applications in the months before a mortgage.
Being on the electoral register at your current address helps lenders confirm who you are. A joint account or joint loan links your credit report to the other person's, so their financial behaviour can affect your credit scores until you ask the agencies to remove the link.
In my experience, lenders are most relaxed about a few late payments that have since been brought up to date, and most cautious about recent defaulted payments, CCJs and anything still unpaid. Satisfied and older is always better than recent and outstanding. Tell us everything upfront and we will match you to a lender whose criteria fit.
Not sure how your credit issues look to a lender? Send us your report and we will tell you straight.
Call 03300 432 428We are fee free on over 90% of the mortgages we arrange. Adverse credit cases can carry a fee of up to £995 depending on your circumstances, and we always agree the amount with you before any work starts.
Your home may be repossessed if you do not keep up repayments on your mortgage.
