At Lightbulb Lending, we believe that your financial past doesn’t define your future, especially when it comes to homeownership. If bad credit has been holding you back from applying for a mortgage, we’ve got good news: there’s a path forward, and it might be shorter than you think.
We’re specialists in helping clients with imperfect credit histories secure mortgages, even those dealing with debt management plans, IVAs, no credit history, bankruptcy, defaults, or CCJs. With access to a panel of specialist lenders and a deep understanding of their criteria, we tailor mortgage advice to your unique financial situation.
In this blog post, we’ll answer one of the most common questions we hear: “How long should I wait before applying for a mortgage if I’ve got bad credit?” Spoiler alert, it may not be as long as you think. Read on to explore how different types of poor credit can affect your application, how Lightbulb Lending can support you, and why the best time to take action might just be now.
What Is “Bad Credit”?
Bad credit can mean different things to different people. It’s not a one-size-fits-all definition, and a variety of financial setbacks can contribute to a less-than-perfect credit file. The key takeaway is that poor credit doesn’t necessarily mean that homeownership is out of reach. Whether you’ve missed a few credit card payments, entered into a debt management plan, or even filed for bankruptcy, these situations can affect your credit rating. But that doesn’t mean you’re locked out of the housing market, especially with the help of experts like Lightbulb Lending, who specialise in securing mortgages for people with poor credit.
That’s why we offer tailored solutions for those dealing with specific credit issues. Here’s a closer look at the different types of bad credit and what they mean:
Defaults
A default occurs when you fail to repay a debt according to the terms of the agreement. It typically happens after you’ve missed a series of payments on a loan, credit card, or other financial obligations. A default can have a significant impact on your credit score and can remain on your credit report for up to six years.
The seriousness of a default largely depends on several factors, including:
- The amount owed
- The type of debt
- How recent the default is
Defaults can make it more challenging to secure a mortgage, but not impossible. Lenders will often look at the age of the default, the amount involved, and whether you’ve demonstrated responsible financial behaviour since the default occurred.
County Court Judgements (CCJs)
A County Court Judgement (CCJ) is a legal order made by a court against you if you’ve failed to pay a debt. This can be a particularly difficult blemish on your credit history as it reflects a more formal acknowledgement of your inability to repay a debt.
Here are key points about CCJs:
- A CCJ remains on your credit report for six years, unless it’s paid off within 30 days.
- CCJs related to larger amounts will have a greater impact on your credit score.
- A CCJ’s impact will diminish over time.
Some lenders may be more lenient when it comes to CCJs, especially if the judgment is older or paid off. In some cases, lenders may even offer mortgages with no requirement to settle the CCJ, particularly if it was a one-off issue and your credit history since then is clean.
Debt Management Plans (DMPs)
A Debt Management Plan (DMP) is an informal agreement between you and your creditors, where you commit to repaying your debts in a more manageable way, usually through a third-party company or charity. While it’s an effective method of regaining control of your finances, a DMP can still negatively affect your credit score.
Important facts about DMPs:
- A DMP may cause creditors to register defaults on your credit file.
- Lenders will look for consistent payments over a 12-month period.
- A larger deposit might be necessary when applying for a mortgage if you’re on a DMP.
Lightbulb Lending works with lenders who specialise in helping clients with DMPs, and we can guide you on the best path forward when it comes to applying for a mortgage.
Individual Voluntary Arrangements (IVAs)
An Individual Voluntary Arrangement (IVA) is a formal agreement between you and your creditors to pay back a portion of your debt over a period of time, usually five years. While IVAs can help you manage debt, they are a serious step and can significantly affect your credit history.
Key things to know about IVAs:
- An IVA typically lasts for five years.
- If you have an IVA on your credit file, you might be required to put down a larger deposit.
- If your IVA has been settled, lenders will be more open to your application.
Lenders can be hesitant about approving mortgages to applicants with IVAs, but Lightbulb Lending works with a network of lenders who specialise in such cases, offering flexible solutions that can help you get back on track.
Bankruptcy
Bankruptcy is a legal status that is declared when someone cannot repay their outstanding debts. While it can offer relief from overwhelming financial burdens, it can also have long-lasting consequences on your credit report.
Important points about bankruptcy:
- You’ll need to wait at least 9-12 months after being discharged before applying for a mortgage.
- Bankruptcy will remain on your credit file for six years.
- You’ll often need a larger deposit to show your commitment to regaining financial stability.
Even with bankruptcy in your past, it is still possible to secure a mortgage. Lightbulb Lending works with lenders who are experienced in providing mortgages to people with a history of bankruptcy, helping you find the best option based on your unique circumstances.
No Credit History
Not everyone who struggles with their finances has poor credit in the traditional sense. In some cases, you may simply have no credit history. This can happen if you’ve never had a credit card, loan, or any other form of credit in your name.
If you have no credit history, Lightbulb Lending can help you navigate your mortgage options. We work with lenders who specialise in helping people with no credit history secure the mortgage they need.
Each of these types of poor credit can affect your ability to apply for a mortgage, but that doesn’t mean you should give up on your dream of homeownership. At Lightbulb Lending, we specialise in finding mortgage solutions for people with a wide range of credit histories, and we can help you understand the best options available for your individual situation.
How long should I wait to apply for a mortgage with bad credit?
Defaults
A default typically stays on your credit report for six years, but you don’t need to wait that long to apply for a mortgage.
What lenders consider:
- The age of the default (older = better)
- The amount defaulted on
- Whether the default has been settled
- Type of default (e.g., mobile phone vs. mortgage default)
Some lenders are happy to consider applications even if the default is recent, especially if it was for a smaller amount and has been settled. We’ve helped clients with defaults as recent as six months secure a mortgage.
County Court Judgements (CCJs)
A CCJ also remains on your credit file for six years. However, like defaults, they don’t necessarily block your chances.
What lenders consider:
- Date of the CCJ
- Amount owed
- Whether the CCJ has been satisfied
- Whether you have multiple CCJs
A settled CCJ, especially if it was resolved more than 12 months ago, can still be accepted by certain lenders. Some lenders may even accept unsatisfied CCJs, depending on the context.
Debt Management Plans (DMPs)
Being on a DMP doesn’t disqualify you from getting a mortgage, but it does mean you’ll need to demonstrate good financial habits.
What lenders consider:
- How long you’ve been on the DMP (minimum 12 months is ideal)
- Consistency of payments
- Size of your deposit
- Reason for financial difficulty
If you’ve been making regular DMP payments for 12 months and have a reasonable deposit (10-15%), you could qualify for a mortgage right now. We know which lenders are DMP-friendly.
Individual Voluntary Arrangements (IVAs)
An IVA can be a longer-term challenge, but not an insurmountable one.
What lenders consider:
- If your IVA is active, you may need a larger deposit (25-30%)
- If your IVA has been settled for over 12 months, your chances increase significantly
- Time since completion is key; the longer, the better
You don’t always need to wait years after an IVA. Even just 12 months post-settlement can open up better options, especially if your credit has improved.
Bankruptcy
Bankruptcy is one of the more severe credit issues, but lenders do understand that life happens.
What lenders consider:
- Discharge date (must be discharged for at least 9–12 months)
- How long ago you were discharged
- Re-established credit history
- Size of your deposit
You can potentially apply for a mortgage just one year after discharge, depending on the lender and your financial recovery. Some clients have even qualified within 18 months.
No Credit History
Believe it or not, having no credit can be just as tricky as having poor credit, because lenders can’t assess your repayment behaviour.
What lenders consider:
- Presence on the electoral roll
- Stable employment and income
- Demonstration of responsible financial behaviour in other areas (e.g., rent payments)
Some lenders don’t rely solely on credit scores and may still offer a mortgage to someone with limited credit history.
Why Waiting May Not Be Necessary
Many people assume they need to wait years after a credit issue to apply for a mortgage, but that’s not always true. In fact, waiting too long without seeking professional advice can slow down your journey to homeownership.
Here’s why you should get in touch now:
- Your circumstances might already meet the criteria of specialist lenders
- You could be closer than you think, especially with a strong income or larger deposit
- We offer a FREE consultation, so you lose nothing by finding out where you stand
Extra Tips: How to Strengthen Your Mortgage Application (Even with Poor Credit)
- Save a Bigger Deposit
The more you can offer upfront, the more you reduce the lender’s risk. Aim for 15–30% if possible.
- Check Your Credit Report
Always review your credit file before applying. Ensure all information is up to date and dispute any inaccuracies.
- Register on the Electoral Roll
It’s a small detail that makes a big difference. Being registered helps confirm your identity and boost your credit profile.
- Avoid New Credit Applications
Too many new credit checks can lower your score. Limit credit activity in the months leading up to your application.
- Get Professional Advice Early
Mortgage criteria can be complex. The sooner you speak to an advisor, the more strategic your application can be.
FAQs
Can I get a mortgage with poor credit?
Yes, many specialist lenders accept applications from people with poor credit.
How long do I need to wait after a default?
Not long! Some lenders may accept applications just 6–12 months after a default.
Do I need to settle my CCJs before applying?
Not always. Some lenders accept unsatisfied CCJs depending on age and value.
Can I apply if I’m still in a DMP?
Yes, provided you’ve made regular payments for at least 12 months.
Is it harder to get a mortgage after bankruptcy?
It can be, but options open up once you’re 12 months discharged.
Do I need a perfect credit score?
No. Specialist lenders assess the full picture, not just your credit score.
Will my interest rate be higher with bad credit?
Possibly, but we’ll help you find the most competitive deal available.
Is there a minimum deposit required?
Typically 10–15% with poor credit, but this varies based on the lender.
Can I get a mortgage if I have no credit history?
Yes, we work with lenders who cater to applicants with little or no credit.
What’s the first step if I’m unsure about applying?
Speak to our team for a free, no-obligation consultation—we’ll guide you through your options.
Contact Lightbulb Lending today for a FREE consultation and let’s get you one step closer to the keys to your new home.
