At Lightbulb Lending, we understand that the journey to homeownership isn’t always straightforward, especially if you’ve had financial bumps along the road. Whether you’re dealing with a low deposit, a modest income, or adverse credit, our mission is simple: to shine a light on the best paths forward.
We’re proud to work with a broad panel of lenders, including those who look beyond the traditional credit scoring system. Our personalised advice and mortgage services, combined with robust insurance protection products, ensure that no stone is left unturned when it comes to helping you own your own home.
In this blog, we’ll walk you through home ownership schemes designed to support buyers like you, even if your credit history is less than perfect. We’ll also cover practical steps for improving your credit score and share how Lightbulb Lending can provide expert guidance every step of the way. Ready to get started? Get in touch with us today to see how we can help.
Getting on the Property Ladder: A Guide to Home Ownership Schemes (Even with Adverse Credit)
Climbing onto the property ladder may feel out of reach if you’re carrying past financial baggage. But here’s the good news: there are schemes and strategies designed to make homeownership achievable, even for those with adverse credit. Let’s unpack the main schemes available in the UK, how they work, and who they’re suitable for.
1. Shared Ownership
What is it?
Shared Ownership allows you to buy a share of a property (usually between 10% and 75%) and pay rent on the remaining portion. You can gradually buy more shares over time through a process called “staircasing.”
Why it’s helpful:
- Ideal for people on lower incomes or with smaller deposits.
- Gives you a foot on the ladder, even if full homeownership seems distant.
- Monthly costs can be lower than renting or full ownership.
Considerations with Adverse Credit:
- Housing associations involved in Shared Ownership tend to be risk-averse.
- Severe adverse credit (e.g., recent bankruptcies, CCJs, or defaults) can result in your application being declined.
- Some leniency may be shown depending on how long ago issues occurred and your current affordability.
2. First Homes Scheme
What is it?
A government-backed scheme offering new-build homes to first-time buyers at a discount of at least 30% compared to the market value. The discount remains with the home forever, benefiting future buyers too.
Who it’s for:
- Key workers, local residents, and first-time buyers.
- Geared towards those with stable income and good credit.
Adverse Credit Compatibility:
- Not very friendly towards those with adverse credit, as it’s primarily aimed at high street lending standards.
- Lenders participating in this scheme are usually mainstream banks, which apply strict credit criteria.
3. Joint Borrower, Sole Proprietor (JBSP)
What is it?
A mortgage arrangement where a family member (e.g., a parent) helps you secure a mortgage without being a co-owner of the property. Their income supports the application, increasing affordability.
Why it’s popular:
- Great for first-time buyers who don’t earn enough alone.
- Useful for younger buyers needing family support without joint ownership complications.
Adverse Credit Considerations:
- Trickier if either party has adverse credit, though a handful of lenders will consider it.
- Lenders assess the credit history and financial commitments of all borrowers.
- It’s crucial that the joint borrower (e.g., parent) is financially stable and not near retirement.
The joint borrower is liable for the mortgage. If repayments aren’t met, their credit record and financial stability could be affected. It must make sense from a lender’s perspective, for instance, a 70-year-old co-borrower might not be suitable.
How can I improve my credit score?
A poor credit score doesn’t have to be a life sentence. With patience and a few smart moves, you can rebuild your financial reputation and improve your mortgage options. Many people who now own homes have had to take these same steps to turn things around—and so can you.
1. Get Familiar with Your Credit Report
Your first step should be to thoroughly review your credit report. You can do this for free with all three major UK credit reference agencies: Equifax, Experian, and TransUnion. Each one may hold slightly different information, so it’s worth checking all three. Scan carefully for inaccuracies such as incorrect addresses, accounts you don’t recognise, or outdated negative entries. If you spot something wrong, raise a dispute—correcting errors could lead to an immediate improvement in your score.
2. Register on the Electoral Roll
This is a simple but powerful fix. Being registered on the electoral roll at your current address helps lenders confirm your identity and assess your level of stability, which is crucial when applying for credit. If you’re not listed, it can raise red flags—even if your financial conduct has otherwise been solid. You can register online with your local council in just a few minutes.
3. Pay Bills On Time
Consistently paying your bills by their due dates is one of the strongest indicators that you’re financially reliable. Lenders look for this kind of behaviour as a sign you’ll meet future commitments like mortgage repayments. Even one missed or late payment on a mobile phone contract or utility bill can impact your score and remain on your report for years. Set up direct debits or reminders to make sure nothing gets missed.
4. Use Credit Responsibly
While it may seem counterintuitive, using credit can improve your score, as long as it’s done sensibly. Try to stay well below your credit card limit, ideally using less than 30% of your available credit. For example, if you have a £1,000 limit, keep your balance under £300. This shows you’re not overly reliant on borrowed money and that you can manage credit wisely.
5. Avoid Too Many Credit Applications
Every time you apply for a credit product, a “hard search” is recorded on your report. Too many of these in a short space of time can suggest financial desperation and lower your score. Instead, space out your applications and, where possible, use “soft check” tools to see your eligibility before you apply. This gives you a clearer idea of your chances without harming your credit rating.
6. Consider a Credit-Builder Card
If you have a low or thin credit file, a credit-builder card can help demonstrate that you can borrow and repay responsibly. These cards are designed for people with limited or poor credit history and often come with lower limits and higher interest rates. The key is to use the card for small, manageable purchases and pay off the full balance each month. Done correctly, this shows good financial behaviour and helps improve your score over time.
7. Pay Off Outstanding Debts
Lenders assess not just your credit history, but also your overall debt levels. By focusing on paying off existing debts—particularly high-interest or small accounts—you reduce your risk in the eyes of potential lenders. Prioritise overdue or defaulted accounts first, and try to avoid any new borrowing while you’re rebuilding. Keep in mind that defaults and similar issues remain on your report for six years, but settling them can still reflect positively.
8. Keep Old Accounts Open
The age of your credit accounts plays a role in your credit score. Older accounts with a good history help show long-term financial responsibility. Unless there’s a compelling reason to close them (e.g., high fees or inactive for years), consider keeping older accounts open and occasionally using them to maintain activity. Closing an account can also lower your available credit, which may affect your credit utilisation ratio.
9. Avoid Financial Ties with People with Poor Credit
Joint financial products—like bank accounts, loans, or mortgages—create a financial association between you and the other person. If they have a poor credit history, it can negatively impact your own credit profile. Before taking out any joint products, ensure the other person has a healthy credit record. If you’re already financially linked to someone whose credit is poor, consider asking the credit agencies to remove the association if the product is no longer in use.
10. Use Open Banking to Your Advantage
More lenders are now adopting Open Banking, which allows them to review your recent spending, income, and budgeting habits directly (with your consent). This can work in your favour if you’ve taken control of your finances, but your credit file hasn’t yet caught up. Open Banking provides a fuller, more real-time picture of your affordability, making it easier to access mortgage products, even with a lower credit score.
Repairing your credit score won’t happen overnight, but every positive step builds momentum. Think of it as a long-term project with life-changing rewards. By making small, consistent improvements in how you manage your money, you’ll not only improve your access to mortgage options, but you’ll also feel more confident and in control of your financial future. With the right approach and expert support, even those with adverse credit can make real progress towards homeownership.
How can Lightbulb Lending help?
At Lightbulb Lending, we believe homeownership should be possible, no matter your financial past. Whether you’re just starting your journey or have been knocked back by lenders before, we’re here to help you find your way forward.
Here’s how we support you:
1. Access to Specialist Lenders
We work with a diverse network of lenders, including those who understand that a poor credit score doesn’t define you.
Many of these lenders offer flexible criteria and use manual underwriting.
2. Personalised Mortgage Advice
No generic advice here, we get to know your circumstances and match you with the right product.
Whether it’s Shared Ownership, JBSP, or another scheme, we’ll explore every route.
3. Insurance Protection You Can Rely On
Mortgages aren’t the only part of the puzzle.
We offer comprehensive insurance services, including:
- Life Insurance
- Income Protection
- Mortgage Protection
- Home and Contents Insurance
4. Human, Honest Support
We’re a team of real people who care about getting you into your new home.
No jargon, no judgement—just clear guidance and straight-talking support.
In Conclusion: Your New Beginning Starts Here
Owning your own home may seem like a distant dream if you’re carrying past credit issues. But dreams aren’t cancelled just because you’ve had a setback.
With the right scheme, a few credit improvements, and expert help from Lightbulb Lending, you can take real, tangible steps towards getting on the property ladder. Whether it’s Shared Ownership, JBSP, or another route, we’re here to switch the light on and show you what’s possible.
Contact our friendly team today for a no-pressure chat about your mortgage options. Let’s turn your “one day” into “day one”.
FAQs
1. Can I get a mortgage if I have a CCJ or default?
Yes, some specialist lenders may accept applicants with past CCJs or defaults, especially if they are over 12–24 months old.
2. What is considered ‘adverse credit’?
Adverse credit includes missed payments, defaults, CCJs, IVAs, bankruptcies, and payday loans on your record.
3. Is Shared Ownership suitable for people with bad credit?
Mild issues might be acceptable, but severe adverse credit often disqualifies applicants due to housing association requirements.
4. Can my parents help me buy a home without being a co-owner?
Yes, through a Joint Borrower Sole Proprietor (JBSP) mortgage. Their income helps your application, but they don’t own the home.
5. How much deposit do I need for Shared Ownership?
Usually between 5% and 10% of the share you’re buying, not the full property value.
6. How long do credit issues stay on my record?
Most negative marks stay on your report for six years.
7. Will applying for multiple mortgages hurt my credit score?
Yes, too many credit checks in a short time can lower your score. Work with a broker who can advise you strategically.
8. Can I get a mortgage with an IVA?
It’s very difficult while in an IVA, but some lenders may consider you once it’s settled and time has passed.
9. What credit score do I need to get a mortgage?
There’s no universal score, but the higher the better. Specialist lenders often focus more on affordability than scores.
10. How can Lightbulb Lending help if I’ve been turned down before?
We’ll review your situation holistically and connect you with lenders who look beyond the numbers. You’re not out of options.
At Lightbulb Lending, we specialise in finding solutions where others see barriers. Whether you’re battling adverse credit or feeling overwhelmed by your options, our team is ready to guide you. Contact us today!
