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No credit mortgages

Written By:
Myles Robinson - Expert Finance Advisor

Posted: Feb 8, 2023

No Credit Mortgages: Can You Get a Mortgage without a Credit History?

One of the most crucial steps for lenders when assessing whether you qualify for a mortgage is checking your creditworthiness.

Typically, lenders conduct a preliminary soft inquiry into your credit for an overview of how well you manage debt and if you have adverse credit issues. In the later stages of the mortgage approval process, they conduct a hard enquiry to take an in-depth look at your credit history.

A borrower’s lack of credit history poses a significant challenge to lenders in determining your creditworthiness. Some lenders automatically reject your mortgage application if you have no credit history, reducing your pool of potential lenders, making it challenging to get a no-credit mortgage.

That said, getting a no-credit mortgage is not impossible. Some specialist lenders are willing to find alternative ways to establish your creditworthiness and lend you money to buy a home.

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What does it mean not to have a credit history?

Having no credit history is not the same as having a bad credit rating. Having no credit means you do not have any recent credit activity to reflect on your credit report and give you a credit score. A poor credit score indicates poor debt management, whereas, with no credit, there is no data to show how well you manage debt. Comparatively, getting a mortgage with a low credit score is harder than getting a mortgage with no credit history.

Lending criteria for no credit history mortgages

Specialist lenders will assess you for no-credit mortgages based on the following factors.

Reason for no credit history 

There is a wide range of reasons why you may not have a credit history, including:

  • You just turned 18 years.
  • You recently moved or moved back to the UK.
  • You do not have an employment history in the UK.
  • If you are married or have a housemate, your spouse or housemate pays all the utility bills.
  • You do not have a permanent address yet.

In the above scenarios, you may have to build a credit history before being considered for a mortgage. For instance, rent a house and pay on time, take up the mobile phone bill, or get credit cards and use them responsibly ensuring your don’t get any bad credit along the way, all of which show up in a UK bank account.


Since you’re considered a higher risk than a borrower with a fair to very good credit score, you must make a higher deposit for a no-credit mortgage. Generally, deposit requirements for borrowers with a good credit score are 5 to 10% of the property value and around 15% for first-time home buyers. If you are a first-time homebuyer with no credit history, you can expect a 15 to 30% deposit requirement.

Interest rate

A no-credit mortgage has a higher interest rate than the average rate for conventional mortgages. However, some specialist lenders may offer a mortgage option to lower the interest rate after five years if you pay your monthly mortgage instalment on time. You may also consider remortgaging at a lower interest rate and better repayment terms, especially if you have built up a good credit history and a high credit score through repaying the no-credit mortgage.


Lenders conduct an affordability test based on your income, income-to-debt ratio, recurring expenses, savings, assets, and investments.

Typically, lenders with a good credit score get a mortgage for four to 4.5 times their income. But, with very good credit scores, they can get up to five to six times their income. Conversely, borrowers with low credit scores or no credit history can expect a credit limit of three to four times their income.

You can qualify for a no-credit mortgage better if you are permanently employed. On the other hand, if applying for a self-employed mortgage, you’ll have to provide your business income statement and tax return reports for at least two years.

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Which types of lenders offer no-history mortgages?

A high street lender is unwilling to offer a standard mortgage to borrowers without a credit history. Besides, they employ an automatic underwriting procedure that automatically rejects applications by borrowers with no credit history. Therefore, you must conduct market research to identify lenders with a manual underwriting procedure or those willing to offer no-credit mortgages.

A specialist lender is your best mortgage provider option, as they manually review mortgage applications on a case-by-case basis. They will assess your reason for no credit, evaluate your ability to afford the mortgage, and then qualify you based on their criteria. You could also apply for a no-credit mortgage with small and local lending institutions such as credit unions.

How to get a no-credit history mortgage

  • Review your credit history 

Even though you do not have any credit history, it is essential to download and review your credit file from the three major credit reference bureaus. Suppose you find recent activity recorded on your report. In that case, it is an indication of fraud, and you would need to follow up on the issue with the relevant credit reference agency before applying for a mortgage.

  • If possible, build your credit history 

As mentioned earlier, getting a mortgage deal with no credit file is possible. However, if possible, take time to build your credit history before applying for a mortgage, as it improves your chances of qualifying.

  • Save for the deposit

The deposit requirement for no-credit mortgages is higher than for a standard mortgage. Therefore, you want to start saving up for the deposit as soon as you consider taking a mortgage. The higher your deposit, the lower your LVT, which translates to a lower interest rate and monthly repayments.

  • Find an experienced specialist broker

Although you can go on to find a suitable specialist mortgage lender and apply for a no-credit mortgage by yourself, it is advisable to work with an experienced mortgage broker in your area. They will help you to find the best deals and guide you through the application process to avoid being declined. Note that a declined mortgage application is detrimental to your credit history and makes it harder to buy a mortgage in the future.

  • Apply 

Your mortgage broker will guide you through the application procedure based on the eligibility criteria of a specific lender. You must gather all the necessary documentation to support your application and supply lenders with evidence of your creditworthiness and affordability. You must provide all the relevant information and documentation upfront to prevent an ongoing back and forth with the lender, causing a delay in the approval process.

Some documents required when applying for a mortgage include bank statements, pay stubs and proof of income, tax returns, proof of address, identification documents, history of rent payments, utility bills payments, etc. If you are unsure which documents and information the lender needs, contact them to ask for their mortgage application requirements.

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Tips for building your credit history and score

Below are some tips to help you build your credit history and attain a high credit score before applying for a mortgage.

  1. Pay your bills on time. It shows you are financially responsible.
  2. Take up credit-builder loans such as secured credit card loans and make payments on time. They are an excellent way to create footprints in your credit report.
  3. Sign up for a credit card and keep your credit balance below 30%. That said, do not sign up for too many credit cards.
  4. Register for the electoral roll. It adds a few points to your credit score and makes it easy for lenders to confirm your identity.
  5. Have a family member or spouse add you as an authorised user on their credit card. The credit account will also reflect on your credit report.
  6. Avoid applying for too many credit accounts at the same time. Potential lenders may perceive it as a sign that you are in a financial crisis. Also, too many credit accounts will impact your debt-to-income ratio negatively and make it difficult to qualify for mortgages. Besides, your total monthly repayment amount may be too high and difficult to keep up with.
  7. Monitor your credit report frequently for mistakes or fraudulent activity. Address any errors as soon as they come up to prevent your credit score from dipping mistakenly.

What are my alternatives for a no-credit mortgage?

Your main alternative is to hold off on applying for a no-credit mortgage and take time to build your credit history and score. A fair to high credit score will enable you to access conventional mortgages at interest rates of 5 to 10% and deposit requirements of less than 15%.

If you have a very good credit score, your application will be approved faster, and you may have room to negotiate favourable repayment terms. You may also be able to negotiate for a slightly lower interest rate, especially if you have a high deposit.

The other option is to apply for a joint mortgage. With a joint mortgage, each partner has an equal share in the property and liability, ensuring that the monthly mortgage instalment is paid on time. If your co-owner has a good credit score, the mortgage lenders will consider it when qualifying your mortgage application. Later, you can have your partner transfer the property ownership to you through a trust deed.

Work with a specialist mortgage broker to get a no-credit mortgage

A specialist mortgage broker is invaluable in several ways when applying for a no-credit mortgage. They understand the mortgage market and know the most suitable lenders for specific credit issues. They also understand different lenders’ eligibility criteria for no-credit mortgages.

Therefore, a specialist mortgage broker will match you with the most suitable lender and help me with the application process to increase your chances of qualifying. They can also help you to negotiate better terms, including lower interest rates and deposit requirements.

Contact us today to get matched with a specialist mortgage broker who will help you secure a no-credit mortgage.

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Why is it harder to get a mortgage with no credit history? 

Typically, lenders rely on your credit report to establish your creditworthiness. They look at your credit history to see how well you manage debt, if you pay on time, and if you have major credit issues.

Your credit history enables them to assess your credit risk and determine whether or not to lend you money. Your credit history influences your credit limit, interest rate, and repayment terms if you qualify. Your credit report can also verify your personal information and identity.

Therefore, it is much harder for lenders to determine your creditworthiness if you do not have a credit record. Some lenders may not be willing to go the extra mile to establish your creditworthiness, which reduces your pool of potential lenders.

How does a specialist lender establish my creditworthiness if I do not have a credit history? 

Because you have no credit history, you will still have to prove to lenders that you are creditworthy. Requirements will vary from lender to lender. However, expect to be asked for proof that you pay your utility bills and rent on time.

The lender may ask for a letter of recommendation from your landlord or your bank statement showing timely payment of utilities and recurring expenses. They will also conduct an affordability test to establish that you can afford to make your monthly mortgage repayments on time.

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