Updated: December 16, 2021

Bad Credit Mortgages in Scotland

Looking for a bad credit mortgage to buy a property in Scotland? Read through our guide to find out what your options are.

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No impact on your credit score

Pete Mugleston

Author: Pete Mugleston - Mortgage Expert

Updated: December 16, 2021

If you’re looking to buy a property in Scotland but you have a poor credit record, it’s still possible to get a mortgage. You may just face a few extra obstacles.

In this guide, we’ve put together everything you need to know, including how to boost your chances of getting your application approved, what deposit you’ll need and how a broker can help.

Read on for more information or jump to the section that’s relevant to you via the links below…

Can you get a bad credit mortgage in Scotland?

Yes. However, you may be limited when it comes to the number of lenders who’ll consider you for a mortgage and the rates on offer.

Some providers will turn you down straightaway if you have an unhealthy credit history and you don’t meet their criteria. However, there are plenty who will consider your application, including both high street names and specialist lenders who operate in Scotland and nationwide.

You may also find you end up paying more for your mortgage. If a lender considers you a risky borrower, they’ll want to balance out the risk of lending to you by charging you a higher rate.

There are, however, mortgage brokers who specialise in arranging bad credit mortgages for people who are buying in Scotland, and they could help you get a better deal.

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What credit issues will lenders in Scotland accept?

‘Bad credit’ is a wide-ranging term that covers a whole host of circumstances. Every lender in both Scotland and across the UK will carry out a credit check before approving an application. Any of the following on your record could raise a red flag:

Missed payments or defaults

Missed loan or mortgage repayments or defaults will create a black mark on your credit history. But don’t panic. It’s still possible to get a mortgage with these on your record. Lenders may just ask for a detailed explanation of the circumstances or, in some cases, you may need to use a specialist lender.

It’s worth noting that some missed payments are considered more serious than others. For example, lenders may be more reluctant to lend to you if you’ve missed mortgage or other secured loan payments than if you’ve skipped a payment on an unsecured loan or a mobile phone contract.


Decrees are the Scottish equivalent of County Court Judgements (CCJs) in England and Wales. Lenders will take into consideration when you received the decree and how big it was when assessing your mortgage application.

If the decree was registered more than two years ago, the likelihood is it will be ignored. However, lenders will apply their own specific criteria and some will be more willing to accept applicants with decrees than others. A specialist bad credit broker will be able to advise you on which lenders to approach.

Individual Voluntary Arrangements (IVAs)

If you’re currently in an IVA, you’re unlikely to get approved for a mortgage in Scotland. After an IVA, however, it’s possible. You may struggle to be accepted by a mainstream lender but there are plenty of specialist providers who’ll consider your application.

Lenders will take into consideration how long ago you entered the IVA (after 6 years, IVAs are removed from your credit file) and the circumstances surrounding the IVA.


Sequestration in Scotland is equivalent to bankruptcy in England and Wales. If you’ve entered sequestration, you’ll struggle to get a mortgage. Some specialist lenders will consider you after you’ve been discharged from sequestration, which is typically 12 months after the order was made by the court.

Although it’s possible to secure a loan from a specialist lender, your choice of deal will be limited and you should expect to pay higher interest rates and fees.

Details of your sequestration remain on your credit file for six years so lenders may view your application more favourably if you apply after this period.

No credit history

Although not strictly an example of ‘bad credit’, having no credit history at all can be just as problematic when it comes to getting a mortgage. If you have no credit score, lenders can’t determine how good you are at repaying debt and, therefore, how risky you are as a borrower. It’s still possible to get a mortgage, however. You’ll just need the help of a specialist broker who can advise which lenders will best suit your circumstances.

How to get a Scottish mortgage with bad credit

There are certain things you can do to improve your chances of getting your application approved if you have bad credit. These are three steps you should take:

Check your credit report

Before you even think about making an application, you should check your credit report. You should make sure all the details are accurate and that you’ve been delinked from anyone you previously had joint accounts with. If there are any errors on your report, you have the right to challenge them, or at the very least add a note explaining any late or missed payments.

You can download your credit reports through our dedicated credit reports hub.

Speak to a specialist broker

If you have bad credit, you should always seek advice from a specialist bad credit broker. They’ll be able to review your situation and advise whether it’s the right time for you to be applying for a mortgage.

If it is, they can tell you which lenders in Scotland to approach and which to avoid. Many Scottish lenders won’t consider you if you have bad credit so a broker who’s an expert in your specific area of concern can save you the stress and expense of wasted applications.

They can also secure the best rates, negotiate with lenders on your behalf and get access to exclusive deals.

We have brokers in our network who specialise in all types of bad credit mortgages in Scotland. Get in touch and we can arrange for an expert to contact you directly.

Build up a deposit and save extra if possible

It’s hard enough to secure a mortgage with a small deposit in normal circumstances. If you have bad credit, it’ll be even harder. That’s why it’s a good idea to build up as big a deposit as possible. If you approach a lender with a large deposit, you’ll be considered less risky and will have a better chance of getting approved and paying a more competitive rate.

Eligibility criteria

There is no specific criteria for bad credit mortgages in Scotland compared to England. Whether or not you get approved will depend on a number of factors, including:

The cause of the bad credit

Lenders will generally be more lenient if you missed a couple of mobile phone payments than if you’ve entered sequestration or defaulted on a mortgage repayment.

How long ago the bad credit event occurred

If the event happened a long time ago and you’ve taken steps to improve your financial situation, you may be viewed more favourably by lenders.

Whether the issue was a one-off event

If you’re a repeat offender, you’ll probably find it harder to get your loan accepted.

The size of your deposit

The bigger the deposit the better as lenders will deem you less risky. Applicants with poor credit typically need a deposit of at least 15%. If the credit issue is more serious, however, for example, you’ve entered into an IVA or sequestration, you may be required to put down as much as 40%.

What you earn now

If you have a stable and regular income and can prove that you’ll be able to pay your mortgage repayments, you’ll be viewed more positively by lenders.

Does where you live in Scotland make a difference?

Where in Scotland you live shouldn’t make a difference to your chances of getting accepted. It’s worth noting, however, that some lenders don’t lend to any applicants in certain regions, for example, the Highlands or away from the mainland. If you live in these areas, you’ll probably need the services of a specialist lender.

Connect with a broker in Scotland who specialises in bad credit

Getting a mortgage if you have bad credit can be challenging but is far from impossible, especially if you seek advice from an advisor who has experience dealing with your specific issue and in-depth knowledge of the Scottish market.

They’ll be able to match you with the perfect lender for your circumstances and help you through the application process.

We work with brokers who have a track record of helping borrowers in Scotland with bad credit secure a mortgage. Give us a call on 0808 189 0463 or make an enquiry and get matched with an expert today for a free initial conversation.

We hand-pick all the advisors in our network and rigorously vet them so you know you’re getting the best possible advice.

Ask a quick question

We can help! We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in bad credit mortgages. Ask us a question and we'll get the best expert to help.

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Pete Mugleston

Pete Mugleston

Mortgage Expert

About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

FCA Disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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