Your credit history is one of the most important factors potential lenders will consider when you submit a mortgage application, even if you are earning a good income. Bad credit, or a low credit score, can have a serious impact on your eligibility for a mortgage regardless of your income. This is because lenders tend to view people with bad credit as an increased risk for defaulting on their loan payments. 

However, it could still be possible to be accepted for a mortgage and purchase the home you want, even if you have a bad credit history. Read on below to see how you could get a mortgage with bad credit but a good income.

Organising your finances

1) Getting your credit score

To get a property mortgage, you will need to get your credit score. It is a three-digit number that indicates how lenders may view you when you apply for credit, and is based on your credit history, including factors such as how much you owe, how often you apply for credit, and whether your payments are timely. Your credit score will be relevant when contacting lenders for a mortgage.

2) Know what a bad credit score is

It is worth knowing what is considered a bad credit rating, so you are aware if yours is generally positive or not. Different credit reference agencies (CRAs) calculate their scores in slightly different ways. Experian, for example, considers a ‘good’ score to be anywhere between 881 and 960, with ‘fair’ or ‘average’ between 721 and 880, whereas others CRAs may differ somewhat.

Getting a credit score at the top end of the scale can be difficult, even without bad credit, especially if you are in the young adult age range. If your credit rating is on the lower side, it is less likely that you will be approved for a mortgage though you may still be able to qualify for specific loans as lenders will often offer people in these circumstances special types of loans.

3) Maintaining a regular income

When a lender is looking at a mortgage application, they are likely to take into account your ability to pay existing monthly expenses, such as rent and utilities. They will also check that you are employed and have kept a steady income for at least two years.

If you are self-employed however, the consequences will be a bit different. As a self-employed worker, you must try to maintain a steady annual salary and provide a minimum of two to three years of accounts to support that. Having a poor credit score when you’re self-employed can be a challenge, but having a strong income will be useful in making it easier for providers to approve your mortgage application.

4) Reducing and eliminating debt

Another key factor to consider when you are looking at how to get a mortgage with bad credit but good income, is reducing or fully eliminating your debt. In society today, the majority of people have to deal with different types of debt, such as student loans or overdue credit card payments. This type of debt can have an influence on your credit score, and some recent statistics have shown that roughly 35% of your credit score comes from this payment history.

To help improve your chances of success for a mortgage loan, it is recommended that you focus on reducing existing debt. If you are seen to be making an effort to repay debts and late payments, a provider is more likely to approve your application. It is important to remember that if the credit report shows an old unpaid bill, you should not make a payment unless it is in full. Partial payments might seem like they are reducing debt, but they will make the debt more relevant, and so making them more obvious and ultimately hurting your credit score.

5) Altering the debt to credit ratio

To successfully qualify for a mortgage with bad credit, it could be beneficial to adjust your debt to credit ratio. This means adjusting the amount of money you owe so that it is lower than the amount of credit you currently have available. Improving this ratio is one of the fastest ways to improve a poor credit rating and help to make your application more attractive to lenders.


Application for the mortgage

1) Be ready to explain the bad credit rating

One option if you have a bad credit score is to discuss it with your lenders and explain the reasons for this history. If you can bring evidence of payments made on time in regard to rent or utilities for at least one year, you might be able to show a steady income. Being honest and discussing a bad credit rating can be beneficial as lenders may be amenable to borrowers who can prove their ability to meet repayments.

2) Speak to an adviser at Finance Advice Centre

Contacting Finance Advice Centre and seeking advice from a member of our expert team will put you in a much stronger position when it comes to your application. This is because our advisers can help you find a suitable lender for your personal financial situation. As well as this, your adviser can guide you through the process to ensure all of the information needed is correctly provided with no errors.

 Getting a mortgage with bad credit, but a good income, can be tricky but certainly not impossible if you make efforts to clear your debts and can prove to a lender that you can comfortably repay your loan. Contact Finance Advice Centre today for more information on this topic or if you have any other mortgage-related queries. 


As a mortgage is secured against your home it could be repossessed if you do not keep up the mortgage repayments. Think carefully before securing other debts against your home.