How to get a mortgage with good income but bad credit

Finding yourself in a position where you have a strong income but bad credit can feel frustrating, especially when you’re looking to get a mortgage. Fortunately, it is still possible to secure a mortgage with these circumstances. Here’s a comprehensive guide on how to navigate the UK mortgage landscape when your income is solid but your credit score isn’t.

Understanding your credit situation

Firstly, it’s essential to understand what constitutes bad credit. In the UK, a bad credit score typically includes issues such as:

  • Missed or late payments on loans or credit cards.
  • County Court Judgments (CCJs).
  • Individual Voluntary Arrangements (IVAs).
  • Bankruptcy.

Check your credit report with agencies like Experian, Equifax, or TransUnion. Knowing your exact credit situation will help you address specific issues and understand the impact on your mortgage application.

Steps to get a mortgage with good income but bad credit

Consult a specialist mortgage broker

Engaging with a mortgage broker who specialises in bad credit mortgages can be highly beneficial. These brokers have access to a wider range of products that aren’t always available to the public and can guide you to lenders who are more likely to consider your application.

Save for a larger deposit

Lenders perceive a lower risk when you can provide a larger deposit. Aim for at least 15-20% of the property value. A larger deposit not only reduces the lender’s risk but can also improve your chances of being approved for a mortgage.

Improve your credit score

While you might be keen to get a mortgage right away, taking some time to improve your credit score can pay off. Here are some ways to boost your credit score:

  • Ensure all your existing debts are paid on time.
  • Avoid taking out new credit.
  • Register on the electoral roll.
  • Correct any mistakes on your credit report.

Consider a Guarantor Mortgage

If you have a close relative willing to act as a guarantor, this can significantly enhance your chances of getting a mortgage. A guarantor agrees to cover your mortgage payments if you’re unable to, which reduces the risk for the lender.

Provide proof of income and stability

Since you have a good income, make sure to provide comprehensive proof of your earnings. This could include payslips, bank statements, and tax returns if you’re self-employed. Demonstrating job stability and a reliable income stream can help offset the concerns around your credit score.

Explore specialist lenders

Some lenders specialise in offering mortgages to individuals with bad credit. These lenders are more flexible with their criteria and are accustomed to working with borrowers in your situation. However, be aware that these mortgages might come with higher interest rates and fees.

Be honest and transparent

When dealing with lenders or brokers, honesty is crucial. Disclose all your financial details upfront. Hidden issues can cause delays or even a rejection, and transparency can help brokers find the best product for your situation.

Mortgage options for bad credit

Subprime mortgages: These are specifically designed for borrowers with bad credit. While the interest rates are higher, they provide a pathway to homeownership when traditional mortgages are out of reach.

Fixed-rate mortgages: If you can secure a fixed-rate mortgage, it offers the security of knowing your monthly payments won’t change, which can be beneficial for budgeting purposes.

Tracker mortgages: These mortgages track the Bank of England base rate. While they can fluctuate, they often start with lower interest rates compared to fixed-rate mortgages.

In summary

Getting a mortgage with a good income but bad credit in the UK is challenging but far from impossible. By taking strategic steps such as consulting a specialist broker, improving your credit score, saving for a larger deposit, and considering guarantor or specialist lender options, you can enhance your chances of securing a mortgage. Remember, patience and persistence are key. Each step you take improves your position and brings you closer to owning your home.

If you found this article helpful, share it with others who might benefit from it. And if you have more questions, feel free to reach out or leave a comment below. Happy house hunting!


Can I get a mortgage in the UK with bad credit?

Yes, it is possible to get a mortgage with bad credit in the UK. While your options may be more limited, and you may face higher interest rates, there are specialist lenders and products designed specifically for individuals with poor credit histories. Working with a mortgage broker can help you find these options.

How does my income affect my mortgage application if I have bad credit?

A good income can positively influence your mortgage application, even if you have bad credit. Lenders consider your ability to repay the mortgage, and a stable, substantial income can mitigate the risks associated with a low credit score. Demonstrating a high, reliable income can improve your chances of approval.

What steps can I take to improve my credit score before applying for a mortgage?

To improve your credit score, you can:

  • Pay off outstanding debts and reduce your credit utilisation.
  • Correct any errors on your credit report.
  • Avoid new credit inquiries and limit new credit applications.
  • Register on the electoral roll and maintain low credit balances.
  • Use credit responsibly and keep old accounts open to build a positive credit history.

 Are there specific mortgage products for people with bad credit?

Yes, there are mortgage products specifically designed for individuals with bad credit. These include:

  • Fixed-rate mortgages.
  • Variable-rate mortgages.
  • Tracker mortgages.
  • Specialist bad credit mortgages from lenders who cater to higher-risk borrowers.

How can a mortgage broker help me if I have bad credit?

A mortgage broker can provide expert advice, access a wide range of lenders, streamline the application process, negotiate better terms, and offer personalised service. They can help you find specialist lenders and products tailored to your financial situation.

What government schemes can help me get a mortgage with bad credit?

Several UK government schemes can assist you in getting a mortgage, including:

  • Shared Ownership.
  • Right to Buy.
  • First Homes.
  • Lifetime ISA (for existing account holders).

These schemes can provide financial assistance, lower deposit requirements, and improve your chances of homeownership.

What should I do if my mortgage application is rejected?

If your mortgage application is rejected, you should:

  • Request feedback from the lender to understand the reasons for rejection.
  • Review and correct any issues on your credit report.
  • Improve your credit score and save for a larger deposit.
  • Consult with a mortgage broker or financial advisor for guidance.
  • Consider applying to specialist lenders who cater to bad credit cases.

How can I demonstrate my ability to repay the mortgage despite having bad credit?

You can demonstrate your ability to repay the mortgage by:

  • Providing comprehensive documentation of your income, employment stability, and savings.
  • Preparing a detailed budget showing your monthly income and expenses.
  • Highlighting any efforts to reduce debt and save for a deposit.
  • Including a personal statement explaining your credit history and financial stability.

Can I use multiple government schemes together to buy a home?

In some cases, you may be able to combine government schemes to maximise benefits. For example, you can use other government scheme alongside savings from a Lifetime ISA. However, it’s important to check the specific rules and eligibility criteria for each scheme.

 How long does it take to improve my credit score?

Improving your credit score can take several months to years, depending on your starting point and the actions you take. Consistent efforts such as paying bills on time, reducing debt, and correcting credit report errors can gradually improve your score. Patience and persistence are key.

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