Mortgage after debt - any experiences?

MS13579

Hi everyone - first time poster but long time reader! 

Looking to see if anyone had any advice or tips after being in a similar situation in order to be ‘mortgage ready’.

I was in about 70k worth of debt and totally mismanaged it, credit scores were double figures at one point. I’ve worked very hard and have now got the debt down to £15k which will be paid off end 2025 - I’m overpaying significantly each month on min payment.

Credit rating is slowly improving and is now around 550 TransUnion and 661 Experian. 

Final 3 defaults will fall off by mid 2026. 

No other defaults or late payments remain on my accounts. 

So I’d like to start thinking about a mortgage for 2027. As I said by this point I’ll have no adverse credit on file. Credit score should continue to improve in meantime. There will be a significant number (20 ish) of closed accounts still showing from paying them off one by one - but all are in good standing.

So I just wondered if anyone was in a similar situation and could give me some positivity around the fact this might be realistic for me? I just feel so sad about all the time I’ve wasted and the money I’ve spent - and really want to turn the page and start afresh.

At time of mortgage I’ll have between 10-20% deposit. No debts. Clear credit. I earn a good wage. My partner (who I don’t live with yet) will also be on mortgage & his file is immaculate - he’s already a home owner. 

Grateful for any thoughts, ideas or reassurances 😊 

thankyou! 

ACG

I dont think I have ever seen a score in double digits before! (not that it matters, dont worry about that).
The closed/settled accounts wont be a problem. The fact you had the debt wont be a problem, it will be more the payment history. There is not much you can do about that now. If they are still on your credit report at the time of application, they will form part of your application. 

Once the most recent default is 3 years old, (6 months time by the sounds of it), you will have options with a 5-10% deposit. In the current climate the rate would be around 6% (maybe a touch under). 

If you wait until the defaults have dropped off, that should help. It is probably worth keeping a record of who you defaulted with. Some lenders have internal records going back further than 6 years. 

Dont worry, by next year you should have options. Holding off until 2027 you will have more options. 

MS13579

Thanks for the really helpful comment, appreciate the advice.

I don’t think I’ll have any adverse payment history by 2027, the only payments I  missed are related to the defaults (1 in April 2019 and 2 in January 2020). All the other debts I managed to keep up with at least minimum payments so they’ll show on my account but will all be in good standing…

Is my understanding there correct? 

Thanks again!

ACG

It sounds like everything will be clear by Jan 2026? 

MS13579

Yes that’s right. Sorry I was a bit confusing there  

so I know I’ll be all good in terms of no defaults or missed payments. But there will still be 20 odd ‘settled’ accounts showing (albeit with no payments missed on any) - and was worried that would be looked at badly.

thanks for the reassurance the longer I wait the more options I’ll have, earliest I’ll have deposit is Jan 2027 so I’m probably panicking a bit too early -

thanks again - appreciate you taking the time to respond! 

Brie

There is always the vague possibility that a debt which you have defaulted may be within the banking group of the mortgage provider you are looking at.    So if you defaulted on a Lloyds credit card and are looking to get a mortgage with Halifax they might still have a look to see what happened to the CC.  

On the other hand they will also be able to see that you have been handling your credit admirably since the default and on that basis are more possibly going to think you a good risk.

ACG

I dont think you need to worry about the cleared debt with good payment history. If anything that will probably be seen as a positive.