Yes. First-time buyers with bad credit get mortgages every year through specialist lenders.

Buying your first home is stressful enough without a credit blip added on top. Good news: it does not rule you out. It just means a bit more planning, and knowing exactly what lenders are actually looking at.

This blog covers what counts against you, what deposit you will realistically need, whether government schemes are still an option, and how to prepare so your application has the strongest chance possible.

Why Is It Harder for First-Time Buyers With Bad Credit Specifically?

It is not really bad credit alone. It is the combination of bad credit and having no mortgage track record to show a lender.

Existing homeowners who apply with bad credit can point to years of on-time mortgage payments as evidence they are reliable borrowers. That payment history counts for a lot. A first-time buyer cannot offer that evidence, because they have never had a mortgage before.

That missing track record narrows the lender pool further than either factor would on its own. The credit issue makes high-street banks say no. The lack of a mortgage history means fewer specialist lenders will say yes without additional reassurance, usually in the form of a larger deposit.

This does not mean it is impossible. It means fewer lenders serve this exact combination, which is exactly where specialist knowledge matters most.

Is It Bad Credit, or Just a Thin Credit File?

These get confused constantly, and they are not the same problem.

Bad credit means negative marks on your file: CCJs, defaults, missed payments. These are records of something going wrong. A thin credit file means little to no credit history at all. This is common if you have never had a credit card, loan, or phone contract in your own name.

Some lenders decline thin-file applicants not because of anything negative, but because they simply have no data to assess. There are no marks against you. There is just nothing there.

This is a fixable problem, and often faster than genuine bad credit. Building a light credit history by using a credit builder card responsibly or keeping a phone contract paid on time for six to twelve months before applying can make a real difference.

If you have been declined and are not sure whether it was because of bad credit or a thin file, checking your report with all three agencies is the quickest way to find out.

What Credit Issues Are Most Common for First-Time Buyers?

A few specific issues come up again and again with younger, first-time applicants.

Missed phone or utility bill payments are probably the most frequent. Small defaults from student-era finances, unpaid buy-now-pay-later balances, and poorly managed guarantor loans also appear regularly.

These are usually smaller in value and more recent than the credit issues seen in older applicants. Specialist lenders factor that context in. A missed phone bill from two years ago is not treated the same way as a large unsatisfied CCJ.

For a broader look at how different credit issues affect mortgage eligibility, our adverse credit mortgage advice covers the full picture.

Not sure how your own credit issue stacks up? Our Criteria Hub breaks down exactly how the type, age, and severity of what's on your file affects your options. Check the Criteria Hub →

How Much Deposit Do First-Time Buyers With Bad Credit Need?

Typically 10% to 15%, though it depends heavily on the severity of the credit issue.

A 5% deposit is possible with minor, older issues and the right specialist lender. This is the exception rather than the standard, but it does exist for applicants whose credit problems are small and well in the past.

A deposit of 10% to 15% is the realistic range for most first-time buyers with bad credit. That opens up a solid range of lenders, along with rates that are genuinely competitive.

A deposit of 20% to 25% opens significantly more options and usually secures better interest rates. The larger the deposit, the more confidence lenders have.

This is higher than the 5% many first-time buyers with clean credit can access through standard schemes. That is the main practical trade-off of having a credit issue as a first-time buyer, and it is worth being realistic about it from the start.

Can First-Time Buyers With Bad Credit Use Government Schemes?

Sometimes, depending on the lender and how significant the credit issue is.

Schemes like the Mortgage Guarantee Scheme and Shared Ownership are not automatically ruled out by bad credit. But availability depends entirely on which lenders participate in each scheme and their individual credit criteria.

The Mortgage Guarantee Scheme, now a permanent fixture also known as Freedom to Buy, allows first-time buyers to purchase with just a 5% deposit, with the government guaranteeing part of the loan to the lender. Because it still runs through a normal mortgage application, your credit history is assessed exactly as it would be for any other mortgage.

A Lifetime ISA (LISA) is worth considering well before you apply. It adds a 25% government bonus to what you save towards your first home, up to £1,000 a year, and a larger deposit built this way can improve your position with lenders in the way described above.

Shared Ownership and the First Homes scheme can also reduce the total amount you need to borrow, sometimes making the difference between a lender saying yes or no when your credit file is not perfect. First Homes specifically offers a discount of at least 30% on the market price of eligible new-build properties.

Some specialist lenders do accept applications through government schemes. Others do not. There is no blanket rule either way.

Do not assume a scheme is off the table without checking. A broker can quickly confirm which schemes are realistically accessible for your specific credit profile, saving you the guesswork.

Can a Guarantor Help a First-Time Buyer With Bad Credit?

Yes, in some cases. A guarantor with clean credit and stable income can strengthen an application significantly.

Not all lenders offer guarantor mortgages, so this route depends on finding the right one. The guarantor takes on real financial responsibility if payments are missed. That is not a formality. Both parties need to understand and accept what is involved.

A guarantor does not erase the credit issue from the lender's view. The negative mark is still there, and the lender still sees it. But the guarantor provides additional reassurance that can tip a borderline application into an approval.

How Should a First-Time Buyer With Bad Credit Prepare?

Preparation matters more here than almost anywhere else in the mortgage process.

One. Check your credit file with all three agencies, or use Check My File. Look for errors and dispute anything incorrect.

Two. Register on the electoral roll at your current address. This is quick, free, and strengthens your credit profile.

Three. If your file is thin rather than negative, start building a light credit history now. A credit builder card used carefully for six to twelve months makes a measurable difference.

Four. Save consistently for your deposit. Even small, regular amounts show lenders good financial discipline.

Five. Avoid new credit applications in the three to six months before applying for a mortgage.

Six. Speak to a broker before approaching any lender directly.

Want to know where you stand? Share your details and we will give you a clear assessment. No cost, no obligation, and no impact on your credit file.

How a Broker Helps First-Time Buyers With Bad Credit

This is exactly the kind of combination a whole-of-market broker exists to solve.

Fewer lenders serve first-time buyers with bad credit than either group alone. That means knowing which of them to approach, and in what order, matters far more than usual. A wrong first application wastes a hard search and makes the next attempt harder.

A soft search first protects your credit file while identifying realistic options. You find out what is achievable without any risk to your score.

A broker also knows how to present a thin credit file differently from a truly adverse one, which can affect which lenders are worth approaching and on what terms.

If you are also self-employed on top of being a first-time buyer, our self-employed bad credit mortgage page covers that combination too.

As an FCA-regulated bad credit mortgage broker, we specialise in exactly these harder-to-place cases.