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If you’re applying to buy your council or housing association home through the Right to Buy scheme, but you’ve had credit issues in the past, you may be wondering whether this will stop you getting a mortgage.
While bad credit does make things more difficult, it may still be possible depending on your circumstances.
Lenders will take a closer look at your financial history, so it’s important to understand what to expect and how to prepare.
What Counts as Bad Credit?
Bad credit can include missed payments on bills or credit cards, defaults, County Court Judgements (CCJs), Individual Voluntary Arrangements (IVAs), or even previous bankruptcy.
Not all situations are viewed equally, and how long ago the issue occurred can make a difference.
Lenders will look at:
- Whether the debt has been repaid or settled
- How recent the issue was
- The total amount involved
- Whether there are multiple problems or just one
Even smaller issues like missed phone bills may be considered, especially if they appear alongside other credit concerns.
Right to Buy Eligibility vs Mortgage Approval
Being eligible for the Right to Buy scheme doesn’t automatically mean a mortgage will be approved.
The scheme is based on your tenancy history, but mortgage approval depends on whether a lender believes you can repay what you borrow.
Lenders will assess affordability, your credit score, and your repayment history. The presence of bad credit can affect both how much you can borrow and whether you’re approved at all.
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Will I Need a Deposit?
In many cases, the Right to Buy discount can be used in place of a traditional deposit. That said, if you have bad credit, some lenders may ask you to contribute your own funds to reduce their level of risk.
The larger the discount (or deposit), the more options you may have. Lenders are more likely to consider applications with a higher percentage of equity in the property.
What Might Help?
If you’ve had credit issues, steps like the following could improve your chances:
- Making sure any outstanding debts are settled
- Avoiding new credit commitments in the run-up to your application
- Checking your credit report for any inaccuracies
- Gathering documents that show consistent income and stability
None of these actions can guarantee success, but they may help paint a better picture of your current financial position.
How UK Moneyman Can Support You
Some lenders are more open than others to applicants with historic credit issues.
Our mortgage advisors have experience working with more complex cases and can explain which options might be available based on your circumstances.
We’re here to offer guidance, not false promises. If a Right to Buy mortgage with bad credit looks possible, we’ll help you understand how it works, what’s realistic, and what steps you can take next.
