Can I Remortgage with Bad Credit?

What Counts as Bad Credit for Remortgaging?

Bad credit is a broad term that covers a range of issues on your credit file. It can include missed or late payments, defaults, county court judgements (CCJs), individual voluntary arrangements (IVAs), bankruptcy, and debt management plans. Even having a thin credit file — meaning very little borrowing history — can be treated as a negative by some lenders.

Each UK lender has its own criteria for what it considers acceptable. A missed mobile phone payment two years ago will be viewed very differently from a recent CCJ for several thousand pounds. The severity, recency, and frequency of adverse entries all play a role in how your application is assessed.

It is worth noting that adverse information stays on your credit file for six years from the date it was recorded. After that period, it drops off automatically, which can significantly improve your options.

How Bad Credit Affects Your Remortgage Options

The main impact of bad credit on a remortgage application is a reduction in the number of lenders willing to consider you and an increase in the interest rates you will be offered. High-street lenders such as Barclays, HSBC, and NatWest typically require a clean credit history for their most competitive deals. If your file shows adverse entries, you may be directed towards specialist or sub-prime lenders.

Specialist lenders price their products to reflect the higher perceived risk, so you should expect to pay a premium — often between 1% and 4% above mainstream rates, depending on the nature and severity of your credit issues. Arrangement fees may also be higher.

Your loan-to-value ratio becomes particularly important with bad credit. The more equity you have in your property, the more willing lenders are to overlook past credit problems. If you can demonstrate an LTV of 75% or less, you will generally find more options available to you.

Steps to Improve Your Chances of Approval

Before applying, there are several practical steps you can take to strengthen your position:

• Check your credit reports with Experian, Equifax, and TransUnion to understand exactly what lenders will see and dispute any errors
• Register on the electoral roll at your current address if you are not already — this is one of the simplest ways to boost your score
• Pay down existing debts where possible to reduce your debt-to-income ratio
• Avoid making multiple credit applications in the months before your remortgage, as each hard search leaves a mark on your file

If your current deal is not expiring for several months, use that time to build a consistent record of on-time payments. Even six months of clean payment history can make a meaningful difference to how lenders view your application.

Using a Broker for Bad Credit Remortgages

A whole-of-market mortgage broker is particularly valuable when you have adverse credit. Brokers have access to lenders that do not deal directly with the public, including many specialist adverse credit lenders. They also understand each lender's specific criteria, which helps them match you with a lender likely to approve your application rather than wasting time with unsuitable ones.

A good broker will also know which lenders carry out manual underwriting rather than relying solely on automated credit scoring. Manual underwriting means a real person reviews your application and considers the context behind any credit issues, which can work in your favour if you have a reasonable explanation for past problems.

Look for a broker who is authorised and regulated by the Financial Conduct Authority (FCA) and who charges transparent fees. Many adverse credit brokers work on a fee basis rather than commission only, so make sure you understand the cost structure before proceeding.