First-Time Buyer Mortgage Bad Credit History

Can you buy a house with bad credit as a first-time buyer?

Yes, Plenty of lenders do bad credit mortgages and first-time buyer mortgages, and some combine the two very well.

First-time buyers with bad credit often find that their options are a little more limited, but by using a mortgage broker, you’ll have more access to lenders that like this kind of case and improve your chances of being accepted.

Can I get a mortgage as a first-time buyer if I have a CCJ, IVA, default, bankruptcy or payday loan?

Let’s start with a CCJ, which is a County Court Judgment. As a first-time buyer, CCJs don’t stop you from getting a mortgage. Lenders will look at what happened, the value, when it was registered on your credit report and whether it’s satisfied or not.

It’s similar with Individual Voluntary Arrangements (IVAs). Lenders look at the value and what the repayments are. Some lenders will actually lend if you’ve got an active IVA, contrary to the common myth that an IVA means you can’t get a mortgage.

Defaults usually come before a CCJ. When you default on an account, you’ll have a default date, and a satisfied date if you decide to pay that off. Lenders look at that the same way as a CCJ.

Bankruptcy is probably one the worst situations of all. But you can get a mortgage as a first-time buyer if you’ve been bankrupt – although the deposit can be a challenge. At the time of recording this in August 2025, the deposit required is around 30%. It will depend on how recent the bankruptcy was and when you were discharged.

Sit down with a broker and let us work through your credit report. We can map everything out for you and confirm the deposit you’ll need to buy a property now. We’ll compare that to the situation if you wait 12 or 24 months, so you can work out the best plan for yourself.

Since COVID, we’ve seen a lot of people using payday loans – ordinary people that have never had bad credit, but decide to tap into that kind of lending. The majority of lenders don’t like these, because of the high interest rates attached.

It’s seen as a desperate way of getting finance. But that said, some lenders can make exceptions and are more accepting if you don’t already have bad credit. But if you’re thinking of getting a mortgage, it’s best to stay away from payday loans.

Do first-time buyers need a credit score? Can I get a mortgage if my credit score is very poor?

When we run a Decision in Principle, your score will run through a lender’s system. It will be compared against their internal scorecards and the computer will give a yes or a no decision.

Some lenders out there don’t credit-score at all, and just do a credit search. When the mortgage underwriter manually looks at that, they make a decision based on what they see.

What’s quite common with first-time buyers is a ‘thin’ credit profile, where they’ve not really had much credit. You might have had a mobile phone and some car insurance, but no previous borrowing. That would be deemed as a thin credit score.

Clients shouldn’t be penalised for having a thin credit score because they might be a really good payer – there’s just minimal information in the background to evidence that to a lender.

In short, you don’t really need to worry too much about your score. You might log onto Checkmyfile or Experian and the score’s really low – but don’t panic. It’s not too relevant.

What is the best home loan for a first-time buyer with bad credit?

The best home loan or best mortgage is dependent on the individual circumstances. If we had two first-time buyers with bad credit, one product or lender might be good for one person and not for the other.

As a very brief example, perhaps somebody is buying a forever home. They’re struggling a little bit on affordability and they want peace of mind – so a five-year fixed-term product could be perfect for them.

The other first-time buyer might be looking to renovate a property and increase its value. A five-year fix won’t be the best product for them, as the work they do will increase the property value within a year or two – and they can then get a new mortgage at a lower Loan to Value.

So sit down with a broker and be very clear about what your plans are in the short and long-term. The adviser can then make a recommendation to you, and explain the pros and cons, the fees, and everything else.

How much deposit will I need? How much can I borrow if I have bad credit?

Lenders look at the bad credit in terms of values and recency. Somebody that got a CCJ yesterday will need a much higher deposit than somebody whose CCJ happened five years ago.

There are lenders that will still do a 5% deposit mortgage if you’ve got 10 CCJs and 10 defaults. They’re super flexible. We just have to look at your current credit profile and the interest rates available to you, and then match those up with your future plans.

What’s the process of applying for a mortgage with bad credit as a first-time buyer?

You’ve got a couple of different options. You can go to your bank and see what products they can offer. Most banks do the credit-scoring function we mentioned before – they’ll run you through the system. And if it says no, unfortunately, that’s that.

Personally, if I had bad credit I would sit in front of a broker, work through the credit report with them and see which lenders would accept my circumstances as they are.

If you’ve got bad credit, naturally you pose a higher risk to that lender – so their interest rates are slightly higher. We often see people who have been on a comparison site and looked at the cheapest mortgage payments – but their credit score might not be good enough to qualify for those cheap deals.

Your income, your affordability and the debts that you’ve had in the past all affect your mortgage options. A good broker will help you navigate that landscape and also help you with insurance, solicitors, estate agents… everything.

What steps can I take to improve my chances of getting a mortgage with bad credit as a first-time buyer?

Sit down with a broker in advance if you can. We have people that come to us 12 months before they plan to buy a property.

They might have just gone through a bankruptcy, just noticed a CCJ or had their car repossessed. We can look at the credit profile now and tell them, firstly, what would be available if they wanted to buy a home now. We also explain what they need to put in place so that when we do present their case to a mortgage lender, it’s as attractive as possible.

A good example of that is gambling. Millions of people gamble on a regular basis, but a lot of lenders don’t like to see that on bank statements. Some aren’t particularly concerned if it’s not excessive, but it makes the application process much easier if it isn’t there at all.

That’s the kind of tip we share with you in advance of looking for a property or applying for a mortgage.

You’ve demonstrated how a mortgage broker can help. Have you got anything else to add?

We’ve pretty much covered it. The only thing I would add is that there is a massive stigma attached to bad credit.

People are often embarrassed about what’s on their credit report. Don’t be. You’d be surprised how many people have got bad credit. Social media plays a big part in what people think is acceptable now.

I look at a lot of people’s finances, and I can tell you that a lot of people are driving around in fancy cars and have a lot of credit and finance behind them. Don’t be embarrassed about high levels of debt, missed payments and CCJs. Let’s sit down, stay calm and work through it.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.