Complex cases

“I have defaults on my credit file but the deal itself is strong”

Bridging lenders underwrite the property and the exit first, and the borrower second, so adverse credit is rarely fatal to a bridging application. It affects pricing and narrows the panel, but a strong security and a credible exit carry far more weight than they would on a mortgage.

An illustrative situation, not a client case study. It describes the kind of enquiry this market sees. Any figures are examples, not a quotation, and no credit check or lender decision is involved in reading this.

Sound familiar?

You have defaults, county court judgments or past arrears on your file
Mainstream lenders have declined without discussing the deal itself
The property and the exit are genuinely sound
The adverse is historic, or has a clear explanation behind it

The situation

Credit history is a proxy. Mortgage lenders use it because they are lending against future income over decades and need some signal about reliability. A bridging lender is lending for months against a property they could sell, so the signal matters much less.

That does not mean it is ignored. It affects pricing, the lender pool and sometimes the loan to value. But a borrower whose business went through a difficult period five years ago is a very different proposition to a mortgage underwriter than to a bridging one.

Why the usual lenders say no

Mainstream lending is largely automated, and adverse credit frequently triggers a decline before anyone reads the case.
Affordability models penalise past arrears heavily regardless of context.
High-street lenders have little appetite for explaining or making exceptions.

What usually works

Leading with the security and the exit

Loan to value, the quality of the property and the strength of the exit do most of the work. A 55% loan to value with a sold-subject-to-contract exit is a very different case from an 75% loan to value with a vague plan.

Explaining the adverse properly

Underwriters respond well to context and badly to surprises. A short written explanation, with dates and evidence of how it was resolved, submitted upfront, is worth more than it sounds.

Choosing lenders who underwrite manually

Several bridging lenders make decisions with a real underwriter rather than a scorecard. Those are the ones worth approaching with a case that needs explaining.

Planning an exit that does not depend on your credit

If the exit is a refinance, your credit file matters again at that point. A sale exit sidesteps the issue; a refinance exit needs the credit position to have improved by then.

Roughly how the numbers look

Illustrative figures for this situation
Effect on pricing	Usually a higher monthly rate than a clean file
Effect on loan to value	Sometimes a lower maximum
What matters more	Loan to value, property quality and the exit
What is usually fatal	Current possession proceedings, or undisclosed adverse

Disclose everything at the outset. Adverse discovered at underwriting costs far more than adverse disclosed on day one, because it also costs you the lender’s trust. These are examples to show the shape of a deal, not a quotation. Work out your own figures in the bridging calculator.

What we would need from you

A full and honest picture of the adverse: dates, amounts, current status
A short written explanation of what happened and how it was resolved
Your current credit report, which you can obtain free
Details of the property and the loan to value
Your exit, with evidence
Proof of deposit or equity and its source

Things that catch people out

Do not omit anything. Lenders will find it, and an undisclosed default is worse than a disclosed one.
If the exit is a refinance, check the exit lender’s credit criteria before drawing the bridge.
Multiple recent credit searches can themselves be a negative. Let us approach lenders rather than applying widely yourself.

Questions we get asked

Can I get a bridging loan with bad credit?

Often, yes. Bridging lenders underwrite the property and the exit first and the borrower second, so adverse credit is not automatically fatal. It can affect pricing and which lenders will look at the case, which is exactly where a broker is useful.

Will it cost me more?

Usually somewhat, and the effect is larger at higher loan to value. At a conservative loan to value with a strong exit, the difference can be modest.

What sort of credit problem is actually a barrier?

Live possession proceedings, recent bankruptcy without discharge, or anything undisclosed. Historic defaults that have been settled are a much smaller obstacle than most borrowers expect.

The product that usually fits

See how it works

Every case is different. A specialist will confirm what actually fits yours.

Rather talk now?

020 4525 4876

9:00am – 5:30pm, Monday to Friday

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