How To Get a Help to Buy Mortgage With Bad Credit

illustration of How To Get a Help to Buy Mortgage With Bad Credit

Can I get a Help to Buy mortgage if I have bad credit?

Yes, you can get a Help to Buy mortgage with bad credit. It will depend on your individual circumstances, because there’s different levels of ‘bad credit’, but getting a Help to Buy mortgage with bad credit is definitely possible. Help to Buy is only available to first time buyers.

Getting a Help to Buy mortgage when you have bad credit will be trickier than someone with a perfect credit score. You'll need to find a mortgage company who specialises in lending to people with bad credit. The best way to find them is to use a specialist mortgage broker, who knows the market, will be able to find the right deal for you, and who'll make your application look as good as possible to potential lenders.

Our Mortgage Experts work hard to  understand your situation and can find lenders who are more likely to accept you. Get in touch to find out your options.

What is Help to Buy?

The Help to Buy scheme is a government-backed scheme helping first time buyers get on the property ladder with a 5% deposit.

The scheme provides you with a government loan to put towards the cost of a new build home in England. The loan ranges from 5-20% of the property value (40% in London), and you'll need to purchase your home from a registered Help to Buy homebuilder. 

The Scottish and Welsh Help to Buy schemes work slightly differently from the English version. In Scotland, you can obtain a 15% equity loan on a new-build home up to the value of £200,000. The equity loan is interest-free for the lifetime of the mortgage, as opposed to England where interest kicks in after 5 years. 

In Wales, the maximum equity loan is 20% on new builds worth up to £300,000. Like England, interest also kicks in after five years. The scheme is not available in Northern Ireland. 

The good thing about an equity loan to buy your first home is that you won’t need to borrow as much on a mortgage. Meaning you could get cheaper rates than if you were otherwise taking out a 95% LTV mortgage. 

The downside is that a lot of good mortgage deals aren’t accessible to you if you’re using Help to Buy. It’s still possible to get a good rate, you might just need some advice from a mortgage broker who has experience with Help to Buy. Our Mortgage Experts  know the market  and how to get the right deal for you, even if you have a low credit score. You can read more about the benefits of working with a broker in our Guide: 6 Reasons Why You Should Use a Mortgage Broker.

What credit issues affect Help to Buy mortgages?

While it's possible to get a Help to Buy mortgage with a low credit rating, your application's approval will depend on what type of bad credit you have and certain factors. Lenders will want to know what caused your bad credit and how long ago it happened. Finding a lender who specialises in your type of bad credit will maximise your chances of getting a Help to Buy mortgage.

The first thing you need to do is see what your credit file looks like currently. To get your credit report, we recommend checkmyfile*. checkmyfile shows data from the major UK credit reference agencies (Experian, Equifax, TransUnion) which will give you a full picture of your report. Read our Checkmyfile Explained Guide to get to grips with it. 

Below are the most common credit issues and how they can affect your Help to Buy mortgage application.

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Late payments

Missed or late payments happen. It's part of life. Some lenders don't like to see these at all on your credit report, while others understand that they're common, and not a severe credit issue. How many late payments you have and how long ago they were will determine how seriously a lender takes it. Usually, if the payment is made within the same month it’s due, then it won’t be reported as a missed payment to credit agencies.

The type of account you've missed a payment for will also have a big impact on your mortgage application. Credit cards, phone bills and current account overdrafts will carry the most weight. 


When you don't pay a bill at all, then that account goes into default. It's when you don't keep to your agreement to pay back the money that you owe. Each default will stay on your credit report for six years.

When you apply for a Help to Buy mortgage with defaults on your file, lenders will look at them closely. They'll want to know how many defaults you have, how long ago they happened, and how much money you owed. They'll also consider whether you've paid off the debt since and how much you've been able to save for a mortgage deposit. 


An Individual voluntary arrangement (IVA) is an agreement you make with the people you owe to pay all or some of your debts. If you're in or have been in an IVA then it can make it harder to get a Help to Buy mortgage, but not impossible. Most big banks and high street lenders will turn you down flat, but there's some specialist mortgage companies who lend to people in your situation.

Lenders will look at a few things closely when you apply for a Help to Buy mortgage. They'll want to know if you're currently still in an IVA and when it happened. They'll also look to see if you've kept up with your repayments. They might also ask you for two years' proof of repayments.

A lender's main concern will be how long ago your IVA occurred and if you have any other credit issues on your file.


Contrary to what you might've been told, it's possible to get a Help to Buy mortgage after bankruptcy. Bankruptcy is a legal status which happens when you can't pay any or all of your debts. A year after being declared bankrupt, you're 'discharged', meaning you're released from any debts covered by your bankruptcy and you no longer have to follow the restrictions of being bankrupt (these include acting as a director of a company or trying to borrow more than £500 without declaring your bankruptcy).

Not to say that getting a Help to Buy mortgage will be easy following bankruptcy. You'll need to find a specialist lender who will look at your unique circumstances on a case-by-case basis. You may even be asked to put down a bigger deposit, or be offered a higher interest rate. Working with a specialist mortgage broker - who knows the market and which lenders are most likely to accept you - is the best option if you've been bankrupt and want to understand your Help to Buy mortgage options.

County Court Judgements (CCJs)

A CCJ happens when you owe money to someone and they take court action against you. A CCJ appears on your file when the court confirms that you owe the money.

There are some mortgage lenders who will consider your Help to Buy application with a CCJ. They'll look at the value of the CCJ, how many you have, how old they are, and whether you paid the debt. Generally, the older the CCJ the better, but some specialist lenders will consider you if you have a more recent CCJ.

How does affordability affect a Help to Buy mortgage with bad credit?

Mortgage companies don't just look at your credit history when you apply for a Help to Buy mortgage. They also look at your affordability to see if you'll be able to make the monthly repayments. Your affordability is how much money you can comfortably afford to borrow, and is usually based on your income, outgoings and your credit score.

Get an idea of how much you could borrow with our Mortgage Affordability Calculator.

Is Help to Buy a good idea?

The Help to Buy scheme is a good option for first time buyers who otherwise wouldn’t be able to get on the property ladder. The government agrees to lend you up to 20% of the property price in the form of an equity loan, and you only need to put down a 5% deposit up front. 

The scheme has enabled over 200,000 people in the UK to buy a home, who otherwise wouldn’t have been able to get on the property ladder. However, it’s not without its critics, who’ve suggested that it mainly benefits housing developers, as opposed to home buyers.

What are the pros and cons of Help to Buy?

Help to Buy advantages

  1. You don't have to save up a big deposit

  2. Your mortgage rate will be cheaper because your LTV is lower

  3. You won't pay interest on your government load for five years

  4. After five years you'll pay a competitive rate of 1.75% on your loan

  5. You can make payments on your loan when you like

Help to Buy disadvantages 

  1. Your loan isn't a fixed amount, but a percentage of your home's value

  2. Not all lenders offer Help to Buy mortgages

  3. Your remortgaging options are more difficult

  4. You can only purchase a new-build home

  5. You need permission for home improvements 

Read more about Help to Buy to see if it's right for you.

Do I qualify for Help to Buy?

As of 2021, to be eligible for the Help to Buy Equity Loan you must:

  • Be a first time buyer

  • Be buying a new-build home 

  • Not own an existing home or residential land

  • Not have a sharia mortgage finance

To qualify for Help to Buy, your monthly income and outgoings will be checked. You'll also need to sign a legal document confirming that you're a first time buyer.

Use our Mortgage Affordability Calculator to get an idea of how much you could borrow on a Help to Buy mortgage.

What can I do if my Help to Buy application is declined?

If you've been declined a Help to Buy mortgage then you'll need to step back and consider your options carefully. You may feel anxious, but don't hurry to apply to another lender straight away. If you get denied again this will hurt your credit score even further. 

Most big banks and high street lenders have a rigid criteria for mortgage applications, and just aren't set up for people with complex credit histories. If you've been refused a Help to Buy mortgage then it's a good idea to speak to a specialist mortgage broker. Our Mortgage Experts know the market and have experience getting mortgages for people with bad credit, just like you. They know how to make your application look good, and have the specific knowledge needed to choose the lender most likely to accept you. If you need a Help to Buy mortgage but have bad credit, submit an enquiry.

Read more about what to do after a mortgage rejection in our Guide: What to Do if You've Been Refused a Mortgage 

How can I improve my credit score before a Help To Buy mortgage application?

Applying for a Help to Buy mortgage can be stressful, especially if you have bad credit history. One thing you can do to strengthen your application is check your credit score and see how to improve. 

It's easy to get a copy of your credit report. for a detailed overview of your credit file, go to checkmyfile. checkmyfile shows information from the big credit reference agencies, giving you a full picture of your credit status. And it's free with a 30 day trial (usually £14.99 a month).

When you have credit issues, it’s best to face them head-on. Once you know where you stand, you can start work on improvements. Below are our top tips for improving your credit rating before applying for a Help to Buy mortgage.

  1. Check your credit file for errors
    Have a look at your report in detail and check if everything looks correct. Sometimes mistakes get made, so contact the company who billed you if something doesn't look right.

  2. Review your personal information
    It sounds obvious, but it's worth checking your information is accurate and up-to-date. Any mistakes in your name, address or other details will impact your score. Be on the lookout for any spelling errors, and if you spot any mistakes you should report them to the credit reference agencies.

  3. Get on the electoral roll
    Register to vote at your current address - known as being on the electoral roll. By doing this you make it easier for lenders to verify your identity and current address. Check if you're on the electoral register

  4. Don't use all your available credit
    When applying for your Help to Buy mortgage, you should check how much credit you're using out of the total credit available to you. This is referred to as ‘credit utilisation’. Lenders like to see a responsible use of credit to know you're trustworthy. As a general rule, it's best to stay under 30% of your available credit. 

  5. Keep your accounts secure
    Don't risk worsening your credit file by leaving it vulnerable to fraudsters. When you look at your accounts credit report, check everything on there’s familiar. 

  6. Get your name on the household bills
    If you’re paying any household bills but your name isn’t on the account, it won’t be counting towards your credit score. Don't let your good bill-paying go unnoticed.

  7. Spread out credit applications
    Don't make lots of credit applications in a short space of time. When you apply for credit, lenders will carry out a ‘hard search’ on your credit history which is then noted in your report. A hard search stays on your credit file for 12 months, so if you have lots of these hard searches in a short space of time, lenders might think you’re trying to get a lot of credit because you're not managing your money. If you need credit then make sure your applications aren't too close together.

  8. Check if you're linked financially to anyone else
    Your credit report includes anyone else you're tied to financially. If you've got a joint account with someone who has a poor credit score then this will impact your score. Check if you have a joint account or credit card with someone else, and if you don't need it anymore you should remove yourself. 

You can read more about how to improve bad credit in our Guide: How to Improve Your Credit Score Before You Apply for a Mortgage


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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