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Bad credit mortgages in Scotland

Can I get a bad credit mortgage in Scotland? Get the right advice here

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By Pete Mugleston  | Mortgage Advisor Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 6th March 2020 *

Under the right circumstances it's definitely possible to get a mortgage with poor credit, even if you have ‘severe’ adverse on your file, such a bankruptcy or a repossession.  

To make the process of getting a bad credit mortgage as smooth as possible, you’ll need to know that lenders in Scotland and England can assess poor credit mortgage applications differently.

To give you all the information you need to know about adverse credit mortgage lenders in Scotland, we’ve created this handy guide which includes the following:

If you’re looking for advice and want to know what sort of mortgage you could get in Scotland, call us on 0808 189 2301 or make an enquiry.

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What is bad credit?

‘Bad credit’ is a term often used by creditors to describe a record of payments that is less than perfect. For example, a loan that hasn’t been repaid on time or credit card payment that has been missed.

In some instances though, ‘poor credit’ might appear on your file simply because there is no record of any borrowing history. With no history, lenders have less evidence to suggest you will repay your mortgage and so you become a riskier borrower.  

Here are some other examples of ‘bad credit.’

  • No credit history
  • Low credit score
  • Late payments
  • Missed mortgage payments
  • Defaults
  • CCJs
  • IVAs
  • Debt management Schemes
  • Repossessions
  • Bankruptcy
  • Multiple credit problems

A lender, no matter where in the UK, wants to feel confident that their loan will be repaid so a history of ‘poor credit’ can suggest that there is a risk. This can result in fewer lenders willing to take on that risk, so as a bad credit borrower, there will be a reduced amount to choose from.

Check your credit score for adverse

If you have been rejected for a mortgage in Scotland for having a poor credit score, it might surprise you to know simple things like not being registered on the Electoral Roll can result in your report displaying your credit reliability as low.

As well as this, some of the information on your credit report might even be out of date. Credit reference agencies don’t always display accurate information and any changes to your credit report (for example a debt that has now been cleared) can take up to 3 months to appear as settled on your file.

All of these things can cause issues for anyone who would like a mortgage with bad credit in Scotland, so check your report with each of the main credit reference agencies so that it can be amended if necessary.

You can sign up for your free trials here.

Can I get a mortgage with bad credit in Scotland?

Yes, you can secure a mortgage in Scotland if you have poor credit, though it depends on your personal circumstances, location, what type of adverse you have, when/if the adverse was satisfied/settled and the total amount you debt you owe/owed.

Many policies are postcode dependent, and some lenders such as Nationwide will only lend to specific Scottish Isles including Orkneys, Shetlands, Arran, Bute, Harris, and Skye. Some lenders will require additional costs from the borrower in circumstances where the property valuer must travel to an island.

Below, we’ve taken a quick look at some common adverse credit types with information collated from various lenders and their potential requirements for lending in Scotland.

For a better understanding of how your poor credit could affect your application, speak with an expert. They’ll be able to perform a whole-of-market search based on your circumstances to find the best lenders available.


Some lenders might require you to have 0 default(s) recorded in last 6 months, with up to 4 defaults recorded in last 24 months and a total the value not exceeding £5,000. Some may decline if your default(s) are more than £2,000.

However, some providers might lend to poor credit borrowers in Scotland if your defaults are under a certain amount and fall under a specific amount of time, for example a maximum of 2 defaults under £250 each within 3 years. You may be able to submit a detailed written explanation of your circumstances, which a lender may use to lend outside their criteria.


Getting a mortgage as a poor credit borrower in Scotland with one or more county court judgements (CCJs) will depend on whether the CCJ is satisfied or unsatisfied, and how recently it was issued.

For example, some lenders may require you to have no more than one satisfied CCJ with a total value of no greater than £500. The dates settled also vary from lender-to-lender, with some not lending if issued within the last 3 years, whereas others may not be concerned about specific time limits.

Some providers may ignore history CCJs altogether, though they typically want them to be satisfied. Detailed, written explanations of the circumstances around your CCJ may also be considered by some lenders as part of your application.


Lenders will rate arrears based on severity and date registered, and you may be subject to a senior underwrite.

Some lenders may require the applicant to have no declining unsecured credit over a set period.
Some might accept a maximum number of 3 consecutive missed payments within the last 24 or 36 months (with no new arrears in the last 3 months), while other providers won’t accept any arrears that occurred within the last 36 months.

Many lenders will accept arrears from communication contracts, utility bills, and mail order accounts, and some will cap the total amount to £250, £500, or sometimes more. Other lenders will be far more lenient, and will consider applications based on your individual circumstances, especially if the arrears seem inconsistent or out of character.

Make an enquiry and we’ll match you with an expert who can guide you in the right direction.

Debt management plans

If you’ve taken out a debt management plan (DMP), the impact it will have on your mortgage application will depend on how recently you registered, if it’s current and satisfied or unsatisfied, and whether the rest of your credit history is poor or acceptable.

Some lenders won’t outright decline your application while on a current/unsatisfied debt management plan, as they can assess the overall risk of your individual case. Some won’t lend if your DMP includes a pay day loan.

While most high street mortgage providers won’t lend to those with a DMP, there are others who will. Speak with an advisor to find out more.


Whether you qualify for the mortgage you want as a poor credit applicant with bankruptcy will depend on how many years you’ve been discharged, with 5 or 6 years being the preferred amount.

Most providers won’t lend to those who have been discharged for less than 3 years, though there are some who will consider applicants soon after a discharge.

To find out which providers would lend under your circumstances, make an enquiry.


Some lenders can potentially accept those with individual voluntary arrangements (IVAs), though many require the IVA was registered more than 6 years ago. Borrowers could also be subject to a senior underwrite.

Others will accept applicants when the IVA has been satisfied for more than 3 years, and they’ve maintained a clean credit profile for the same length of time. They may also require a maximum loan to value of 75%, though this will vary between providers.

Is it harder to get a mortgage with bad credit in Scotland?

Not necessarily. Properties can be cheaper in parts of Scotland compared to those in England, especially those in rural areas. The lower property value can attract buyers with poor credit as it means a smaller mortgage is needed, and this can sometimes increase the likelihood of approval.

However, lenders view rural properties as a riskier investment as their location can make them more difficult to resell.

Therefore if you have bad credit and want to buy a property in an area that isn’t in an urban location, you might find that the number of lenders to choose from is smaller.

With fewer options, some borrowers find that they end up taking a mortgage out with a higher interest rate compared to rates offered for property in areas that are more built up i.e. Edinburgh.

Can I find a bad credit mortgage lender in Scotland?

There are lenders in Scotland that will consider mortgages for borrowers with poor credit and there are also those that are more likely than others to approve a mortgage for a property in a more rural location, such parts of the Scottish Highlands.

In fact, every lender has different criteria when it comes to making a decision about lending to someone with a more complex situation. For example, one lender may decline you for a default whilst another may approve you. Some lenders have strict conditions and won’t approve mortgages for properties made out of wood whereas others are happy to, in the right circumstances.

Finding the right lender can save you money and also ensure that you are able to buy a property that is right for you. This can take time but with a mortgage advisor who understands your circumstances as well as the current market, it can be made a lot easier.

Talk to an advisor for more information on this, or alternatively, see our ‘bad credit’ information section.

The differences between buying a property in England and Scotland

There are a number of differences between Scotland and England where mortgage lending is concerned, and they include...

Stamp Duty

If you are planning on buying a property in Scotland with or without poor credit, there are some differences to be aware of.

One is that in Scotland since April 2015, there has been no Stamp Duty charge. This can be appealing for a bad credit buyer as any money put buy for Stamp Duty can then be used towards a deposit. Often the bigger the deposit the better with bad credit mortgages as with some lenders a deposit between 15 - 40% can be required.

However, unlike England, the Scottish government do charge a Land and Building Transaction Tax (LBTT). This can work out a lower cost when comparing it to Stamp Duty as the charge is more proportionate to the price of the property.

Surveying the property

Another difference is that in England, before you buy a property, you as the buyer sometimes have to pay for and commission a survey to get a detailed inspection of the property's condition. This can be frustrating if you’re on a tight budget and pay for a survey only for the sale to fall through.

In Scotland, the survey is commissioned by the seller’s surveyor (who must be on an approved panel) and then relied upon by you and your mortgage provider. This means that as the buyer, you don’t have to pay for a survey. This helps to reduce the cost of buying a home, which is especially great for someone who has poor credit, as it could potentially mean less borrowing.

Why you should speak to a bad credit specialist

We work with trained brokers that specialise in ‘bad credit’ mortgages in Scotland. They can take the time to understand your situation and find a lender that is best suited to you.

As well as this, they can manage any research, negotiations or paperwork on your behalf, saving you yet more time and hassle.

With access to hundreds of ‘poor credit’ mortgage lenders across the UK, including ones in Scotland, they are in a prime position to find you the best mortgage.

Speak to an expert

If you have questions about ‘poor credit’ mortgages in Scotland and want to speak to an expert for the right advice, call us on 0808 189 2301 or make an enquiry.

Updated: 6th March 2020
OnlineMortgageAdvisor 2020 ©

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of 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 info 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 who 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.