Quick Answer
Bad credit does not automatically stop you getting a mortgage. Missed payments, defaults, CCJs, completed DMPs, IVAs, discharged bankruptcy and even a previous repossession may be considered by some lenders depending on the type, age and severity of the issue, whether debts have been settled, your deposit, affordability and your credit conduct since.
Introduction
Many people search for a mortgage after seeing a default, missed payment or CCJ on their credit file and assume the answer will be no. In reality, many borrowers still qualify for a bad credit mortgage, depending on the type, age and severity of the issue.
The reality is often more nuanced. An Atom Bank broker poll found that 81% of brokers had seen an increase in clients with adverse credit or failed traditional credit scores over the previous 12 months (Atom Bank, May 2026). More borrowers than ever are trying to secure a mortgage with imperfect credit histories.
The problem is that most people do not know which credit issues lenders may be prepared to accept and which ones are likely to cause serious difficulties. A missed payment from two years ago is not assessed in the same way as a recent bankruptcy, even though both appear on a credit file. That uncertainty leads many borrowers to delay their plans, apply to the wrong lender, or assume they have no options when they may still be mortgageable.
At Everest Mortgage Services, we regularly help borrowers understand where they stand before an application is submitted. Knowing how lenders view different types of adverse credit can help you avoid unnecessary rejections and focus on the options most suited to your circumstances. This article is for general information only and should not be considered financial advice.
How Lenders View Adverse Credit
Not all adverse credit is treated the same. Lenders look at the type of credit issue, how much was owed, whether it has been resolved, and how long ago it happened. A missed payment from several years ago is usually viewed very differently from a recent bankruptcy, even though both may appear on a credit file.
Time also matters. Most adverse credit information remains on your credit file for six years before dropping off. During that period, taking steps to improve your credit score can help strengthen your future mortgage application.
As credit issues become older, many lenders become more flexible, particularly when there have been no further problems and the rest of the application is strong.
Another key factor is whether the debt has been satisfied. A satisfied default, CCJ, IVA or bankruptcy is generally viewed more favourably than one that remains unresolved. For many lenders, the fact that a credit problem has been dealt with can be just as important as the problem itself.
Different lenders also use different credit reference agencies and apply different criteria. This means one lender may decline an application that another is willing to consider.
Understanding how lenders assess adverse credit is important because it helps separate genuine obstacles from issues that may still be manageable with the right lender and mortgage strategy.
7 Types of Bad Credit That Might Not Stop You Getting a Mortgage
1. Missed or Late Payments
A missed payment is one of the most common credit issues lenders see. In many cases, it is also one of the least damaging.
Most lenders are far more concerned by a recent pattern of missed payments than a single payment that was missed a few years ago and quickly brought up to date. A one-off late credit card payment from two years ago tells a very different story from several missed payments across multiple accounts in the last 12 months.
The key questions lenders ask are:
- How recent was it?
- How many payments were missed?
- Has the account been brought back up to date?
Older missed payments often become less important over time, especially when the rest of your credit history is strong.
What helps?
- Check all three credit reports before applying.
- Keep every current account paid on time.
- Avoid new credit applications in the months before a mortgage application.
- Give recent missed payments time to age where possible.
We regularly see borrowers assume a missed payment means an automatic decline. In reality, lender choice often matters more than the missed payment itself.
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2. Defaults
A default happens when a lender closes an account after a prolonged period of missed payments, typically several months. It is more serious than a late payment because it shows the debt was not resolved through normal repayments.
That sounds alarming, but many borrowers are surprised to learn that an older satisfied default does not automatically rule out a mortgage.
The biggest factor is usually whether the debt has been settled. For example, Virgin Money’s published criteria have previously allowed up to two satisfied defaults with a combined value of £2,000 within the last six years, while unsatisfied defaults are not accepted.
Not every lender uses the same limits. Some are stricter. Others are more flexible.
A default from four years ago that has been fully settled will usually be viewed far more positively than a default from last year that remains unpaid. Many lenders offer mortgage options for borrowers with defaults, although the available products will depend on the circumstances.
What helps?
- Check the default date on your credit file.
- Keep evidence showing the debt has been settled.
- Consider clearing outstanding defaults before applying where possible.
- Speak to a broker if the default is recent, large, or still outstanding.
3. County Court Judgments (CCJs)
Many borrowers see a CCJ on their credit file and assume their mortgage options have disappeared. That is not always the case.
A County Court Judgment (CCJ) is a court order requiring you to repay a debt after legal action has been taken. Because it involves the courts, lenders generally view it more seriously than a default.
The biggest factor is whether the CCJ has been satisfied. An unpaid CCJ is often a major obstacle with mainstream lenders. A satisfied CCJ can be much more manageable, particularly when it is small and several years old.
For example, Virgin Money’s published criteria allow a maximum of one satisfied CCJ worth up to £500 within the last six years, while unsatisfied CCJs are not accepted. Other lenders use different limits, and specialist lenders can often be more flexible.
Many borrowers focus on the existence of the CCJ. Lenders are usually more interested in its age, value and whether the debt has been resolved.
If your CCJ has been paid, obtain a Certificate of Satisfaction and make sure your credit file reflects the correct status. Having that paperwork ready can make the underwriting process much smoother.
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4. Debt Management Plans (DMPs)
A Debt Management Plan is an informal arrangement that allows you to repay debts at an affordable rate, often through organisations such as StepChange or National Debtline.
Many people are surprised to learn that a DMP itself is not usually the main issue. The real focus is often the credit problems sitting behind it, such as defaults, missed payments and arrears.
An active DMP can make obtaining a mortgage difficult because it signals ongoing financial pressure. Virgin Money’s current criteria, for example, state that applicants must not have a debt management plan in place.
A completed DMP tells a different story. It shows that you addressed the problem and reached the end of the arrangement. Lenders will still see any underlying defaults, but a completed plan with satisfied debts is generally viewed more favourably than one that is still running.
Many of the successful adverse credit mortgage cases we see involve borrowers who have completed their DMP, kept their finances stable afterwards and allowed time to pass. Specialist mortgage options may become available depending on your circumstances and how long the DMP has been completed.
In those situations, lender choice becomes increasingly important. If your DMP is still active, it is often worth getting independent debt advice before applying for a mortgage.
In many cases, the strongest strategy is to finish the plan, keep all payments up to date and build a period of clean credit history before approaching lenders.
5. Individual Voluntary Arrangements (IVAs)
An IVA is one of the more serious forms of adverse credit. It is a legally binding agreement that allows you to repay part of your debts over a fixed period, usually five or six years, with any remaining qualifying debt written off at the end. It is also a form of insolvency, which means lenders pay close attention to it. (GOV.UK, 2025)
If your IVA is still active, mortgage options are extremely limited. Most mainstream lenders will not consider an application while an IVA is in progress. Virgin Money’s published criteria state that IVAs are not acceptable within the last six years, even if completed.
Once an IVA has been completed, the picture starts to change. Some specialist lenders may consider applications before the six-year mark has passed, although larger deposits and higher rates are common. The further away you are from the IVA and the stronger your recent credit conduct, the more options tend to become available.
Many borrowers focus on the completion date. What often matters more is the start date. An IVA usually remains on your credit file for six years from the date it began, not from the date it finished. (GOV.UK, 2025; Experian, current guidance)
If you have completed an IVA, keep your completion certificate safe. At Everest Mortgage Services, it is one of the first documents we recommend gathering before exploring specialist mortgage options.
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6. Bankruptcy (Discharged)
Bankruptcy is often seen as the point where homeownership becomes impossible. In reality, lenders view it as a serious credit event, not a permanent exclusion.
Bankruptcy is a formal legal process where assets may be used to repay creditors and certain debts can be written off. Most people are discharged after 12 months, but the bankruptcy remains visible on their credit file for six years from the bankruptcy order date. (GOV.UK, 2025)
Mainstream lenders typically want to see a discharged bankruptcy and several years of clean credit history afterwards. Virgin Money’s criteria state that bankruptcy is not acceptable within the previous six years, even when discharged.
This is where many borrowers get caught out. They assume the six-year period starts when they are discharged. It does not. The clock generally runs from the bankruptcy order date. (GOV.UK, 2025)
Specialist lenders may consider applicants sooner, particularly where there is a strong deposit, stable income and a clear period of good financial conduct since the bankruptcy.
From our experience, lenders are often interested in what happened after the bankruptcy as much as the bankruptcy itself. A clean track record since discharge can make a meaningful difference to the options available.
7. Repossession
A previous repossession is generally viewed more seriously than missed payments, defaults, CCJs or even many insolvency cases because it relates directly to a past mortgage.
Repossession occurs when a lender takes possession of a property after mortgage payments have not been maintained. From a lender’s perspective, it is evidence of a previous mortgage failing, which is why criteria are often much stricter.
Virgin Money’s published criteria state that applicants must never have had a property repossessed. Other mainstream lenders also tend to take a cautious approach, although some specialist lenders will consider cases once enough time has passed. This does not mean a future mortgage is impossible.
Time is often the biggest factor. A repossession from many years ago, followed by stable employment, clean credit conduct and a healthy deposit, will usually be viewed differently from a recent repossession with ongoing credit problems.
Many successful applications after repossession involve specialist lenders that assess the full story rather than relying on a single event from the past.
If you have experienced repossession, focus on rebuilding your credit profile, maintaining perfect payment conduct on current commitments and strengthening your deposit position. Those are usually the factors that create opportunities when lender choice is limited.
Compare Your Credit Issue at a Glance
Use this table as a quick self-check. Find your credit issue in the first column and read across to see how lenders typically view it and what your next step should be.
| Credit Type | Stays on File For | Typical Lender View | Best Next Step |
| Missed or Late Payments | 6 years | Older, isolated cases often acceptable | Keep payments up to date |
| Defaults | 6 years from default date | Satisfied defaults viewed more favourably | Settle the debt if possible |
| CCJs | 6 years from judgment date | Small, satisfied CCJs may be accepted | Obtain proof of satisfaction |
| DMPs | 6 years from each default | Active plans are restrictive | Complete the plan |
| IVA | 6 years from IVA start date | Active IVAs usually unacceptable | Obtain completion certificate |
| Bankruptcy | 6 years from order date | Serious but improves after discharge | Build clean credit history |
| Repossession | Usually 6 years | One of the hardest issues to place | Rebuild credit and save a deposit |
These are general market patterns, not guarantees. Mortgage decisions depend on factors such as deposit size, income, affordability, the age of the credit issue and individual lender criteria. Criteria can change over time, and some specialist lenders may take a different view.
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Worried Bad Credit Could Stop You Getting a Mortgage?
Bad credit does not necessarily mean your mortgage options have disappeared. The type of credit issue, how long ago it occurred, whether it has been resolved, your deposit, income and affordability can all affect which lenders may consider your application.
At Everest Mortgage Services, we can review your credit history, including missed payments, defaults, CCJs, DMPs, IVAs, bankruptcy or previous repossession, and assess which mortgage options may be available based on your circumstances.
Speak to Everest Mortgage Services before making another mortgage application and find out which lenders may be willing to consider your credit history.
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Get in TouchReferences and Sources
- Atom Bank (2026). Broker poll reporting an increase in adverse credit and failed credit score cases among mortgage applicants.
- GOV.UK (2025). Individual Voluntary Arrangements (IVAs): Official guidance on how IVAs work and their legal status.
- The Insolvency Service (Current guidance). Individual Insolvency Register and insolvency records
- Virgin Money Intermediaries (Current lending criteria). Adverse credit policy covering defaults, CCJs, debt management plans, IVAs, bankruptcy and repossession.
- Experian UK (Current guidance). How long adverse credit events remain on a credit report and how lenders may view them.
- MoneyHelper (Current guidance). Managing debt, credit files and insolvency solutions.
- Equifax UK (Current guidance). Understanding credit reports, defaults, CCJs and adverse credit markers.
- UK Finance (Current guidance). Mortgage lending practices and lender risk assessment considerations.
- Financial Conduct Authority (FCA) (Current guidance). Responsible lending and mortgage affordability requirements.
Information was accurate at the time of writing. Mortgage criteria vary between lenders and can change without notice. Individual mortgage eligibility will depend on factors including affordability, income, deposit size, credit profile and overall circumstances.
