You may have applied for a mortgage recently only to be told that your credit history was not acceptable to the lender. To make matters worse, the bearer of this information may also explain that they are unable to tell you what the problem is.Most lenders use a system of credit scoring to assess potential clients. This system has proved statistically reliable for the lenders but does not take into account individual circumstances. Fortunately there are still some lenders who will look at applications individually

Allowing that you satisfy the lender's requirements with respect to your income and employment, there are two areas which may need examination:

Proof of residence: The lender will need to be able to establish where you have been living for the past 3 years. If you are not on the electoral roll, or do not appear on their credit file, then they will not be able to assess your credit worthiness

Action: You may need to be able to provide proof of where you were living, for example bank statements, utility bills, driving license etc. If you are unable to provide sufficient proof then another avenue might be a 'non status' mortgage.

Credit history: Poor credit will obviously count against you, information regarding your credit history will be held by the credit reference agencies for a period of 6 years. If you have no history at all then that will also go against you, as you have no credit history by which to be judged.

If you have, or have had loans in the past and the payments have been paid on time then this is positive proof of your ability to service a credit agreement, and will be looked on favourably.

Action: If you do not know the nature of the credit problem then you will have to apply to the credit reference agencies for a copy of your file. Most mortgage lenders will use one of the two credit reference agencies listed below:


Arrears with a current or previous mortgage are taken very seriously by mortgage lenders. The more recent the arrears the more difficult the mortgage is to place. Mortgage lenders are interested in the following:

  • How long ago did the arrears occur.
  • How many months were the payments behind
  • Over how many months was the mortgage behind

If you have had arrears with mortgage payments, loan payments or rent arrears then a 100% mortgage will probably not be available to you. A 95% loan to value mortgage may be available depending on the above factors.

If you have current arrears then it will be possible to remortgage however the interest rates offered will be above high street rates and will reflect the increased credit risk.


Default notices are issued to holders of credit agreements where a sequence of payments have been missed. They are regarded as quite serious and will prevent the holder from achieving a 100% mortgage.

2 or 3 defaults up to £5,000 will require a minimum 5% deposit. As with all credit impairments the more recent the default occurred the more serious it is taken.

County Court Judgements (CCJ)

Unless the CCJ is small (less than £250) and over 1 year old a 100% mortgage is unlikely to be granted.

  • 3 CCJ's up to £5,000 will require a minimum 5% deposit.
  • CCJ's up to £10,000 will require a minimum 10% deposit.

Information regarding CCJ's will remain on your credit file for a period of 6 years.

It is not always necessary to settle a CCJ prior to taking out a mortgage although it will obviously help if you have done so.

Individual Voluntary Arrangement (IVA)

The Individual Voluntary Arrangement allows someone who is in financial difficulty to make a formal proposal to settle his/her debts within a reasonable and fixed period of time. This period is normally no longer than 5 years.

The repayment proposal is based on what you can afford to pay and after you have paid for the time agreed, your debt will be settled in full.

Once agreed, an Individual Voluntary Arrangement will also prevents creditors from adding any further interest to your accounts or taking any further action such as County Court Judgements.

The suitability of the IVA solution will depend on your personal circumstances.


If you have been made bankrupt, you will not be permitted to take out any credit until you have been discharged. If your partner has been bankrupt, it is likely to affect your mortgage application unless you can show that there is no financial connection between the two of you.

Immediately after discharge, mortgages will be available, but only with a substantial deposit (25%). One year after discharge the deposit required reduces to 15%.

Details of discharged bankruptcies remain on your credit file for up to 15 years


Rejection by one mortgage lender does not mean that a mortgage is unavailable, there are several lenders who specialise in this market. Some do not lend direct to the public but through authorised intermediaries, such as ourselves.

To enable us to properly source your enquiry you should complete our Full quotation form giving us full information about the nature of the credit problem. In particular:

  • The date when the arrears/default/CCJ occurred
  • The amounts involved or monthly arrears
  • Whether cleared or not cleared and the relevant dates
  • The reason for the credit problem