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Edinburgh · Scotland · UK-wide

Mortgages with adverse credit

Adverse credit does not rule you out of a mortgage — it narrows which lenders will consider you and usually means a larger deposit and a higher rate for an initial period. What matters most is how recent the issue is, how large it was, and whether it is satisfied. A default from four years ago is often invisible to a mainstream lender today; a missed mortgage payment from six months ago is far more significant than a much larger default from three years ago. Prime Mortgages places cases with specialist lenders across the UK. Our fee on complex credit cases is 1%–2% of the loan, subject to a minimum of £495, agreed in writing before any work begins.

What lenders will and will not accept

Scotland has its own insolvency framework — the Debt Arrangement Scheme, protected trust deeds and sequestration rather than IVAs and bankruptcy. Some English-focused lenders and comparison sites handle Scottish entries on a credit file badly. It is worth using a broker who reads them correctly.

Credit issueMainstream lendersSpecialist lenders
Missed payments on unsecured creditOften acceptable if over 12 months oldAcceptable, recent
Default, satisfied, over 3 years oldFrequently acceptableAcceptable
Default, recent or unsatisfiedUsually declinedAcceptable, larger deposit
CCJ over 3 years old and satisfiedOften acceptableAcceptable
Recent CCJDeclinedAcceptable from day one with some lenders
Missed mortgage paymentsDeclinedAcceptable depending on how many and when
Debt Arrangement Scheme (DAS)Declined while activeSome lenders consider once completed
Discharged trust deed or bankruptcyUsually needs 6 yearsFrom 1–3 years post-discharge
Payday loansOften declined even if repaidGenerally acceptable

The single most important thing: do not scattergun applications

Every full mortgage application leaves a hard search on your credit file. Several in a short period looks like distress borrowing and makes the next lender more likely to decline — so a run of rejections actively makes your position worse.

The right sequence is: get your own credit file first, understand exactly what is on it, then make one application to a lender we already know will accept that profile.

Check your file before you apply

Credit files frequently contain errors — settled debts still showing as outstanding, duplicate entries, or defaults recorded at the wrong date. Correcting one wrong entry can move you from a specialist lender to a mainstream one, which is worth thousands over a fixed period.

Check all the main agencies, because lenders use different ones and the data differs between them.

  • Experian, Equifax and TransUnion each hold different data
  • Multi-agency reports (such as Checkmyfile) show all three in one place
  • Adverse entries drop off after six years from the date recorded, not from the date settled
  • You have a legal right to have inaccurate information corrected

The route back to mainstream rates

A specialist mortgage is a bridge rather than a destination. The usual plan is a two-year fixed rate with a specialist lender, during which you keep every payment on time and let the older adverse entries age.

At the end of that period, we remortgage you to a mainstream lender at a materially better rate. We will diarise that review and come back to you — you should not have to remember.

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Common questions

Frequently asked questions

Can I get a mortgage with a default in Scotland?

Yes. A satisfied default over three years old is often acceptable to mainstream lenders. A recent or unsatisfied default needs a specialist lender, typically with a 15% to 25% deposit and a higher rate for an initial period, after which you can usually remortgage to the mainstream.

Can I get a mortgage after a trust deed?

Yes, once discharged. A small number of specialist lenders will consider you from one year after discharge with a substantial deposit, more will consider you at three years, and by six years the entry drops off your credit file entirely and mainstream lenders open up again.

Does a Debt Arrangement Scheme stop me getting a mortgage?

While the DAS is active, effectively yes — lenders will not advance new borrowing to someone in a formal debt management arrangement. Once it has completed and been recorded as such, some specialist lenders will consider you, and the position improves steadily from there.

How much deposit do I need with bad credit?

It depends on severity and recency. Minor historic issues may need only 5% to 10%. Recent defaults or CCJs typically need 15% to 25%. Recent missed mortgage payments or a recent discharge usually need 25% or more.

Will being declined for a mortgage make things worse?

It can. Each full application leaves a hard search, and a cluster of searches in a short period signals distress to the next lender. That is the main argument for using a broker on an adverse case — we identify the lender that will accept your profile before an application is made, rather than after.

How long does bad credit stay on my file in the UK?

Six years from the date the entry was recorded — not from the date you settled it. Settling a default does not remove it, but it does change how lenders view it, and a satisfied entry is materially better than an outstanding one.

Related

We advise across the whole of the UK. Prime Mortgages is based in Edinburgh and knows the Scottish process inside out — Home Reports, offers over, missives, LBTT and the Additional Dwelling Supplement. But our lenders are national, and we advise clients in England, Wales and Northern Ireland every week. Appointments by phone or video, documents handled electronically, so where you live is rarely a constraint.

Not sure where you stand? Ask us.

A twenty-minute conversation will tell you what you can realistically borrow, what it will cost and whether it is worth doing. It is free, and we will tell you honestly if the answer is no.

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