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Bad Credit Myths, Debunked

Paul Coss - Co-founder and Chief Customer Officer 7th March 2022

The world of credit can be really confusing. And if you’ve ever had credit issues, you might have been told different things about how it’ll affect you. In this blog, we’ll be busting the biggest myths that people believe about bad credit. 

Myth 1: You can’t get a mortgage with a bad credit rating

A poor credit score can make things difficult when you’re applying for a mortgage, but it's not impossible. Even if the bank’s told you there’s absolutely no way, there’s other lenders out there who might be willing to consider you, you’ll just need to go a more specialist route. If you’re trying to get a mortgage with poor credit, it’s best to work with a bad credit mortgage broker (like us!) who can find the right lender and work out your options. 

The kind of mortgage you’ll be able to get will all depend on the severity of your credit issues, as well as how recent they were. But just because you have bad credit issues, doesn’t mean you can’t get a mortgage at all. 

Our Mortgage Experts work with lenders who specialise in offering mortgages to people with bad credit. They’ve seen it all, and aren’t judgemental. They have a proven track record of making mortgages possible for people who’ve been rejected elsewhere. Make an enquiry to chat to an expert and find out your options.

Myth 2: Bad credit lasts forever

Just because you have a bad credit score now, doesn't mean that'll always be the case. As long as you continue to make steps to manage your credit and make all your payments on time, your score will eventually improve. Most credit issues stay on your file for six years before they’re deleted. 

It's a good idea to check your credit report regularly, and report anything which looks like a mistake to the credit agency. This is called a 'notice of correction'. We recommend using checkmyfile*. It's free with a 30-day trial (usually £14.99 a month), and gives you a complete rundown from all the big agencies in the UK. 

*Heads up, when you click through to our affiliate links, we may earn a small commission at no extra cost to you. We only recommend sites we truly trust and believe in.

Myth 3: You should close accounts you don’t use

If you have a credit card you don't use, you might think that closing the account will improve your credit score. In fact, doing this might actually bring your score down! Credit agencies measure something called ‘credit utilisation’ - a ratio that shows how much credit you’re using out of all the money that’s available to you. 

By closing an unused account, you take that available credit limit away, bringing your total amount available down and pushing your utilisation up. However, if you don’t feel you can resist the temptation to spend (we know how that feels) you might be better off closing it. 

Myth 4: You can’t have a good credit score on a low income

How much you earn or what you do for a living has absolutely no effect on your credit score. Your credit score measures how good you are with paying back the money you’ve borrowed - that's it. You won’t find any details of your income in your credit file. 

Your income can affect your credit score in other ways, such as your ability to pay off larger debts, but it’s not a direct factor. Lenders will usually ask about your income when deciding whether to give you a credit card or loan. 

Myth 5: You’ll never get a loan or mortgage after being bankrupt  

It’s one of the biggest myths that you’ll ‘never get credit again’ after being bankrupt. 

You can get a loan or mortgage after bankruptcy. But, it can be more difficult compared to someone with a good credit score. That’s because most big banks will turn you down if you’ve ever filed for bankruptcy. They’re just not set up to deal with complex situations. But there are specialist lenders who will still consider you, so you do have options.

At Haysto, we’re working to address misconceptions and remove the stigma that comes with bad credit. Our Mortgage Experts know which mainstream or specialist lenders to approach who’ll offer you the most competitive interest rates. They have a proven track record of getting a mortgage approved with a bankruptcy

Myth 6: Paying off your debts removes them from your credit file

Clearing your debts is great, but it doesn’t remove the evidence. Your credit file will keep a record of any debt - whether paid or unpaid - for six years. The notes in your file are there to show potential lenders how much you’ve borrowed in the past, and if you paid it back. 

This isn’t necessarily a bad thing. If you’ve been great with your repayments then it shows a lender that you’re a responsible person to lend to, making you more likely to get that loan or mortgage. 

However, any defaults or missed payments will be noted, and will stay on your credit file until they drop off.

Myth 7: You can pay someone to repair your credit

You might’ve seen adverts for companies claiming to be able to fix your credit. But there's nothing that these credit repair companies can do that you can't do on your own.

It's not possible for ANYONE to remove something from your credit report - unless it's proved to be inaccurate. 

There are debt management agencies who can help manage your debts when they become overwhelming. But the only way to repair your credit score is to manage it properly - yourself. Read our 10 tips for improving your credit score

Myth 8: It’s your fault if you have bad credit

Good people, bad credit. You can get bad credit for any number of reasons. Whether it’s job loss, a long term illness, or just a rough couple of months. There’s still a lot of stigma around bad credit, and it’s easy to feel overwhelmed and judged.

Studies show that people can feel ‘trapped’ by poor credit ratings. Remember, you’re not just a number on a screen, even if that’s how some banks make you feel. Sorting things out might feel like a daunting task, but knowing where you stand working out how to improve is a good place to start. 

Mind has some great tips on how to boost your mood when it comes to money. You’re more than your credit-worthiness. Even if your score is fair or low now, it doesn’t mean you don’t have options.


Our Mortgage Experts are fully-qualified with experience in bad credit, self-employed and complex mortgages. They have a proven track record of getting mortgages for people who’ve been rejected elsewhere.

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