How to remortgage with bad credit

Remortgaging can be a great way to pay for something like home renovations or paying off debts by taking equity out of your property. It's also a good opportunity to get a better deal on your current mortgage rate. But if you have a ‘poor’ credit score when the time comes to remortgage, you might be worried about your options, or whether you’ll be accepted for a remortgage.

If you need to remortgage with bad credit, you might be concerned about being declined by a lender. Mortgage lenders look into your credit history in detail to get an idea of how you've managed your money in the past. By doing that, they work out their own credit assessment of you. 

In this guide, you'll find everything you need to understand about remortgaging with bad credit and links to other useful information if you're worried about your score.

Think carefully before securing any other debts against your home - it could repossessed if you don’t keep up your repayments.

Can I remortgage with bad credit?

Yes, you can. It’s still possible to remortgage your home if you have a poor credit rating. You just might need a bit more help getting the right mortgage compared to someone with a better credit score. 

Most mortgage lenders and banks will look at your remortgage application in the same way they would if you were applying for the first time. Many high street lenders will look at a bad credit score as an indicator that you’re not great with credit and might decide they don’t want to take the risk. But it’s a big misconception that if you try to remortgage with bad credit then it’s an automatic ‘no’. This isn’t the case.

There are plenty of specialist lenders who’ll look at your mortgage application in detail, rather than automatically reject you based on your credit score. The specialist mortgage market isn’t well known because often specialist lenders aren’t available directly to borrowers. They don’t advertise because they’re only available through specialist mortgage brokers who can help people that have a complex situation. 

If you have a low credit score, it’s a good idea to work with a specialist mortgage broker because they have access to specialist mortgage lenders - the ones with the better deals for people like you. 

If you have adverse credit marks on your credit history then this can make things more difficult, but not impossible.

We're experts in bad credit mortgages, so get in touch to find out your options.

What causes bad credit?

If you've ever been turned down for a mortgage, credit card or loan because of a bad rating, you'll want to know what's caused it. There are a few different factors that negatively affect your credit rating and make you seem ‘riskier’ to lenders:

Missed or late payments

Your credit history gets updated whenever you miss a payment, pay late, or pay less than the minimum on your credit agreement. The more this happens, the worse your score will get over time. It flags to lenders that you're not reliable when it comes to paying back what you owe.  

Getting a CCJ

A County Court Judgement (CCJ) happens if you fail to pay someone money you owe. If you don't deal with a CCJ quickly then it can stay on your credit history for 6 years and affect your ability to get good rates on loans, credit cards and mortgages. If you're issued a CCJ you should try to pay the entire amount within a month. You'll then be given a certificate to say you've settled the debt. 

Being declared bankrupt

Unsurprisingly, bankruptcy really impacts your credit rating. If you've ever been declared bankrupt, this will stay on your credit history for 6 years. The same goes for an IVA (Individual Voluntary Agreement).

Only paying off the minimum each month

Paying the monthly minimum off on your credit card can seem like the easy option. It's not uncommon. But the more you can pay, the less you'll spend on interest, which could improve your score.

Not protecting your accounts

Don't let a fraudster undo your good work by running up bills and damaging your credit rating. 

Having no credit history at all

It might seem like a good way to get the perfect report card, but if you've never taken out any sort of loan or credit card, then credit agencies have no way of knowing whether you're a good person to lend to. This can work against you when it comes to things like mortgages.

Just because you have bad credit now, doesn’t mean you need to wait six years for a clean slate before you can apply to remortgage. If you're looking to remortgage and have bad credit, our Mortgage Experts can look at your options and find a lender that's likely to accept you. Get started. 

What is a bad credit score to remortgage?

There isn’t a universally ‘bad’ credit score, but the lower your credit number the worse your credit profile is. In the UK, having a low credit score can impact how many lenders are willing to let you remortgage. The good news is, it’s definitely possible to remortgage, even with a poor credit rating. 

A bad credit score with Equifax is under 379. A ‘Poor’ credit score with Equifax is 280-379, and a ‘Very Poor’ credit score is under 279. TransUnion categorises a poor credit score as being between 551-565, and a ‘Very Poor’ rating is 0-550.  A very poor credit score on Experian is between 0-560, and a poor credit rating is between 561-720.

The good news is a bad score doesn’t mean you won’t be able to remortgage. It’s a good idea to work with a specialist mortgage broker – they’ll be able to find you better deals with better mortgage rates than most lenders. You can read more about bad credit mortgages in our Guide: Can I Get a Mortgage if I Have Bad Credit?  

Can I remortgage without a credit check?

If you decide to remortgage with your current lender, they may not need to check your credit history. However, if you’re looking to take money out of the property, change the length of the repayments, or amend the type of mortgage you have, then the lender will need to look at your credit report. 

Can I remortgage with a CCJ?

Each lender's criteria is slightly different, but it's definitely possible to get a mortgage with a County Court Judgement (CCJ). Even if your CCJ is settled, you may have to meet other criteria to get approved because of the higher risk involved. These include:

How recently the CCJ was registered

This will be one of the most important factors for lenders when it comes to reviewing your remortgage application. The older your CCJ, the easier it will be to get a mortgage. Some lenders will also need the CCJ to have been settled in the last 12 months.

The CCJ amount

Specialist lenders will usually have an upper limit of CCJ amount they will approve. If the CCJ is less than 2 years old, this is around £2,500. If it happened in the last 12 months it can sometimes go down to £1,000 and you'll probably need to put down a larger deposit.

How many CCJs you've had

If your CCJ has been a one-off, you’ll seem like less of a risk than if you have a pattern of county court judgements. Specialist lenders have an upper limit of the amount of CCJs they’ll accept.

If your CCJ has been satisfied

A satisfied court judgment - one that you've paid off - will be more appealing to lenders. A settled CCJ will drop off your credit file after six years.

Can I remortgage with defaults?

Yes, it's still possible to remortgage if you have a default on your credit record. Mainstream lenders usually prefer applicants to have a cleaner credit, but specialist lenders will approve people with all types of credit history, in all kinds of situations.

Generally, the older the default the better. Lenders will also take into account any other bad credit within your record. 

It’s possible to get a default mark removed from your credit file, but this can only be done by the lender who put it there. It's a good idea to check your credit score regularly. If you spot any marks that shouldn't be there, you can contact the credit agency and ask for it to be removed.

We work with specialist mortgage brokers who help people just like you to access these unique mortgages. See how you can get a mortgage with defaults. 

Can I remortgage with an IVA?

Being in an IVA now or in the past can make things tricky when it comes to remortgaging. It's not impossible though, and lenders can be more lenient with you than if you were applying for a mortgage for the first time. 

Mortgage companies will usually consider you if you've kept up with your IVA repayments. They'll probably want to see proof of the last 12-24 months payments, so have those handy.

Each lender will be different when it comes to IVA remortgages. Generally, you'll be seen as higher risk if the IVA was recently set up or if you have other credit issues. This is because you'll need more equity from your home to counteract the risk you pose to lenders.

Read more about IVA mortgages. 

Can I remortgage if I’ve been bankrupt?

Bankruptcy can cause problems if you’re looking to remortgage. Many high street lenders will flat-out refuse you if you’ve ever been declared bankrupt. Thankfully, it’s not impossible to get accepted  – but you’ll need the help of a specialist mortgage broker to help you navigate what could be a tricky application.

Bankruptcy essentially wipes your credit file. Once you’re discharged (usually 12 months after being declared bankrupt), you have the ability to start rebuilding your rating.

You’ll need to wait until you’ve been officially discharged before submitting an application to remortgage. Be prepared to follow very strict guidelines. Your application will need to be presented properly - and to a suitable lender - to be in with a chance of being accepted. You may also be asked to pay a higher rate of interest.

Don’t rush into an application without first speaking to a specialist. You’ll want to talk to someone who knows the market and has a track record of helping people in your situation. 

Learn more about getting a mortgage after bankruptcy. 

Can I remortgage with arrears?

Remortgaging with arrears may be difficult. Lenders see arrears as a serious form of late or missed payments, especially if it has been over a month. The good news is, some bad credit remortgage lenders can be more understanding if the arrears occurred a while ago or if you have a reasonable excuse for missing payments. Even if you’re currently in arrears, some lenders may be willing to make a remortgage offer if certain requirements are met.

Lenders will look at your reasons for past arrears, and will check your loan-to-value (LTV) to weigh up the size of the loan against the value of the property. They’ll also check your loan-to-income ratio (LTI). The more you can do to reassure a mortgage company, the better chance you’ll have of being accepted. Keep an eye on your credit score and any other credit issues that might hurt your application.

If you’re looking to remortgage with arrears, you’ll need a specialist to find the right deal for you. Get in touch, and one of our friendly Mortgage Experts will find out your options.

Can we remortgage if one of us has bad credit?

Yes, you can remortgage even if one of you on the joint application has adverse credit. Most lenders will add your credit scores together, and you’ll need to meet their minimum score to be considered. 

Some mortgage companies prefer to look at your scores individually. But every lender has different lending criteria they use to decide whether they’re willing to offer you a mortgage. 

Many lenders will base the application score on whoever has the lowest score, so if you have a perfect record but your partner has a difficult history, some lenders will be more concerned with your partner’s lower rating than your good one. 

A lot of the big banks may either refuse you a remortgage or offer you high interest rates, which is why you’ll need a specialist mortgage broker to find you the right deal.

Whatever kind of mortgage you’re wanting to get, if you have bad credit, or your partner does, it will always complicate a mortgage application. But unlike the more mainstream banks, specialist brokers (like us!) work with people with complicated credit histories all the time, so we know what lenders to approach for the maximum possibility of success.

Want to know how much you could borrow with a bad credit rating? Use our Bad Credit Mortgage Calculator to find out.  

What happens if I can’t remortgage?

There’s a number of reasons why you might struggle to remortgage. If you’ve been refused recently, it doesn’t mean you will be in the future. 

The main reasons for a remortgage application being declined are:

Your income has changed

If your circumstances have changed meaning your household income is less than when you first took out your mortgage, then remortgaging could be more difficult.

While income doesn't form part of your credit score, you may not pass the affordability checks if your income is lower. Lenders will look at your new income compared to your outgoings to see if you'll struggle with the new repayments. 

You’ve got bad credit

Having a low credit score will make it harder to remortgage. It's still possible, but you may be asked to pay higher interest on your new repayments.

It's a good idea to check your score regularly and do all you can to build it up. There are a few simple things you can do to build your credit score before a remortgage application. Read more in our Guide: How to Improve Your Credit Score Before A Mortgage Application 

You’ve got a high loan-to-value ratio

The value of your property can go up as well as down. If your home has fallen in value when you come to remortgage, you may be assessed on a higher loan to value (LTV).

LTV is the amount of money you borrow compared to how much the property is worth. Individual lenders have their own maximum LTV. Usually, you won't be able to borrow more than 90% of a property's value.

If the property is worth less than the amount you owe, this can make remortgaging very difficult.

What to do if you’ve been refused a remortgage

If you’ve been declined a remortgage, it doesn’t mean you don’t have options. Every mortgage lender has different criteria they use to decide if they’re willing to lend to you or not. Just because one lender has said ‘No’, doesn’t mean all lenders will. 

Our Mortgage Experts have seen it all and aren't judgemental. Get in touch to find out your options.

Tips for remortgaging with bad credit

Even if you have bad credit, you can still remortgage. But you'll have fewer options open to you than if you had a perfect credit score. Here are some tips to help you be in the best possible position when it comes to remortgaging with a low credit rating.

Use a mortgage calculator

Requirements differ between lenders. You might be turned down by the bigger high street banks, but some mortgage companies specialise in remortgaging with bad credit. 

You can get a general idea of how much you could borrow by using our mortgage calculators before starting a remortgage application.

Try overpaying

If you can wait before applying to remortgage, it might be a good idea to make overpayments on your current mortgage payments. Paying on time will boost your credit rating anyway, and overpaying will cut your balance and increase the amount you own outright. 

HOT TIP: Make sure you check whether your lender has any early repayment charges - you don’t want to be stung with any fees.

Get your debts down

If you manage to save any spare cash, try putting that towards paying off any outstanding debts. Lenders like to see you using 25% or less of the credit that’s available to you (known as ‘credit utilisation’). A low credit utilisation makes you look more responsible to mortgage companies. 

Work on your credit score

There are lots of ways to improve your credit score if you’re worried it’s low. Here’s a few ideas of some quick wins to improve your credit score:

1. Check you’re on the electoral register
   This is easy to do and can make a difference to your credit score. Sometimes, your local council has an old address for you, and things like not having the correct address can make it harder for the credit reference agencies to verify your identity, which can weaken your score. Check your address is correct now on the gov.uk website. 

2. Check your credit history on checkmyfile*
   Checkmyfile is a multi-agency credit checker. It’s the most thorough way to check your credit because it shows you the information that four major credit reference checking agencies have on you. This means you can get a clear view of your credit and also be able to see if anything doesn’t look right. 

For more detailed information on how to improve your credit score, read this full Guide: How to improve your credit score before you apply for a mortgage 

Other quick wins to improve your chances of getting a mortgage are: 

• Make sure you’re registered to vote

• Make sure you pay your council tax

• Make regular credit repayments to show your reliability

*Heads up, when you click through to our affiliate links, we may earn a small commission at no extra cost to you. We only recommend sites we truly trust and believe in.

How can I get the right rates when remortgaging with bad credit?

Remortgaging can be daunting. It's especially stressful if you have bad credit. One of the most important things you can do when looking to remortgage with bad credit is to get help from a specialist mortgage broker. A broker will guide you through the whole process, from your application right through to completion. 

If you go to a big bank, they may not have the right experience to handle your case properly. The last thing you want is to be turned down by a number of lenders in a short space of time, as this will damage your credit score even more. A broker will have the knowledge and contacts to deal with your unique situation. 

There are specialist mortgage companies who lend to people with bad credit, but they don't sell directly to the public - they only deal with specialist brokers (like us!). By getting help from a specialist broker, you're much more likely to find a lender that's suited to your needs and at a rate that’s fair.

Make an enquiry to speak to one of our friendly Mortgage Experts.