Credit Score Basics > Which mortgage lenders don't look at credit score?

Which mortgage lenders don't look at credit score?

Wollit Team2 minute read · Updated 3rd July 2024

While it is possible to get a mortgage if you have a bad credit score or even no credit history at all, it's not easy. Finding a lender willing to approve a mortgage for someone with a less-than-perfect credit history can be challenging.

Some things to keep in mind before you reach out to a mortgage lender who accepts "bad credit" applicants:

You might also need to provide more documents so that the lender can verify your identity and address and figure out if you can afford to repay the mortgage. Things like bank statements, tax returns, and payslips will usually be required.
Even if the lender officially ignores your credit score, they will still ask for your permission to run a credit check. They need to understand how severe your credit problems have been. Some of them might be unwilling to lend you money if you have significant defaults or multiple CCJs, for example.

Which mortgage lenders accept people with poor credit scores?

When looking for mortgage lenders in the UK that don't focus solely on credit scores, there are several options available.

Here are some specialist lenders we could find:

These all advertise the fact that they are willing to give a chance to people with bad credit or less-than-perfect credit histories.

The way they are able to do it is by having a more personalised approach and assessing applications on a case-by-case basis rather than relying heavily on credit scores. They understand that you may have faced challenges or have unique circumstances that traditional lenders simply overlook.

What are the cons of taking a mortgage from a lender that doesn't look at my credit score?

Before you go ahead and sign up for a mortgage simply because there are lenders who will look past your credit history, you should know that a bad credit mortgage comes with some pretty significant downsides:

Higher deposit requirements: Specialist lenders may require a higher minimum deposit, often around 15-25%, compared to the standard 5% deposit. This can be a significant barrier if you have bad credit and want to buy a home.
Higher interest rates: Because these lenders have to compensate for the risk of lending money to you, these bad credit mortgages tend to have interest rates of between 6.5% and 7.5%, not including fees. This means that, on average, they charge around 2-2.5% higher interest rates compared to mainstream lenders when it comes to bad credit mortgages. APRs can get even higher if you have recent or severe credit issues like multiple CCJs or unpaid defaults.
Higher fees: All of the specialist lenders we found charge higher upfront fees, such as arrangement fees or application fees, which can add to the overall cost of the mortgage.

To these, we could also add the much more limited options (you'll have to choose between a handful of lenders) and the longer process. Specialist lenders, by taking into account more than your credit score, almost always have to spend more time and charge additional fees just to review your case.

How can I get better terms for a mortgage if I have bad credit?

There are only two ways to get better terms on your mortgage if you have bad credit: either pay a higher deposit, or improve your credit score. The former is harder to do and takes more time as you need to save more.

But improving your credit score, with some patience, can be as effective. One way to do this is by downloading a credit-building app like Wollit. Wollit is an innovative app that reports your monthly subscription as a loan repayment, which helps you build your credit history, which is the main factor that goes into your credit score.

Plus, Wollit also reports your rent payments to Experian as part of the same subscription, making it count towards your credit history and helping you get one step closer to being a homeowner even as you're still a tenant.