Getting a Mortgage With Defaults or CCJs

How lenders actually read your credit file

High street lenders largely work from a credit score, so a single default can produce an automatic decline with no explanation. Specialist lenders underwrite the detail instead: what the event was, how much it was for, when it was registered, and whether it has been satisfied.

That is why being declined by your bank tells you very little about whether a mortgage is available. It usually just means you were assessed by a system rather than a person.

The four factors that decide your options

Almost every adverse credit decision comes down to these:

• Age: events older than three years are treated far more leniently, and many lenders ignore small items over 24 to 36 months old entirely
• Status: satisfied or settled is much better than outstanding, and clearing an item before applying often widens your choice
• Size: small items, often under 300 to 500, are disregarded by a number of lenders, especially where they relate to communications or utility accounts
• Pattern: one isolated event with a clean record since is very different from a series of missed payments continuing into the last six months

Deposit and rate expectations

As a broad guide, light and historic adverse credit can sometimes be placed with 5 to 10 per cent deposit, moderate adverse usually needs 10 to 15 per cent, and recent or heavier adverse typically needs 15 to 25 per cent.

Rates from specialist lenders start higher than high street pricing. The usual plan is to take a two-year product, keep the file clean throughout, and remortgage onto mainstream pricing once the adverse events have aged. We build that exit into the recommendation from the outset rather than leaving you on a specialist rate indefinitely.

What to do before you apply

Preparation makes a measurable difference to what is available, and none of it involves applying anywhere.

• Get a multi-agency credit report so you can see what every lender sees, rather than one agency's view
• Check each entry for accuracy and dispute anything wrong, as errors are common
• Satisfy small outstanding items where you can and keep the confirmation
• Avoid new credit applications and payday lending in the months before you apply
• Keep every current commitment paid on time, as recent conduct carries the most weight
• Write down the story behind each event, since underwriters genuinely take context into account