Have you ever worried that a missing mobile phone bill or late payment on Klarna has ruined your chances of getting a mortgage? If so, you are definitely not alone.
One of the most common concerns I hear from clients is that a less than ideal credit score and/or a missed payment means an automatic “no” from lenders. The fear of rejection is great, but let’s be clear that having credit issues does not automatically mean you are denied a mortgage to buy your first home.
The rise of “simple” negative credit.
Life is becoming increasingly more expensive, and the cost of living has left its mark on millions, meaning we are seeing a huge rise in simple negative credit.
according to Registration TrustDistrict Court Judgments (CCJs) recently reached a multi-year high of 1.19 million cases. A staggering 43% of these amounts were less than £500, often driven by unpaid mobile phone contracts or small utility arrears.
Buy now, pay later services like Klarna are ubiquitous and used by around 54% of UK adults, but 41% of users admit they have difficulty paying. As BNPL data increasingly hits credit files, hidden debts and late fees are suddenly attracting borrowers. Additionally, about 60% of 18- to 28-year-old users have two to five plans, so hidden debt risk is concentrated among younger borrowers.
the Bank to England Recently reported that default rates on unsecured personal loans have risen to 18.6%This pushed total defaults to the highest level in two years.
With statistics like these, you can see why potential borrowers fear they won’t be able to get a mortgage, but the reality is far from the truth.
Growth of the “near-prime” mortgage market.
The mortgage industry is adapting as many specialty lenders increasingly realize that the “computer says no” approach does not suit the modern borrower. corn Bank close prime minister index (H2 2025) Perfectly highlighting this shift, their latest report points to some incredibly interesting trends:
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They are mostly first-time buyers
59% of Near Prime borrowers are first-time buyers. These are often the people Atom Bank refers to as “newbies,” younger buyers (average age 35) who may have poor credit files or missed simple payments.
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The cost of living is the culprit
Meanwhile, 56% of brokers indicated that cost-of-living pressures directly lead to these minor payment fluctuations. It’s not reckless spending, it’s just the fact that household bills are rising.
The report also identifies “rehabilitated” borrowers who are already on the property ladder but have suffered a life event, such as a divorce or job loss, that temporarily lowered their credit.
As Atom Bank rightly points out, no small mistake should stop you from getting onto the housing ladder, and the near-Prime competitive landscape is absolutely essential to making sure buyers aren’t turned away simply because their credit standing is an obstacle.
In addition, according to consulting Broadstonemortgage sales to borrowers with poor credit histories during the second half of 2025 were 24% higher than in the second half of 2024 and 34% higher than in the first half of 2025.
The momentum continued into 2026, with nearly 6,000 mortgages sold in the first half of the year alone, and Q2 2026 was the highest quarterly total since Q3 2008.
The good news: You have options
The simple fact is that more and more mortgage products are being designed specifically for borrowers with mild negative credit. In fact, technology provider Twenty7tec reports that there are currently 4,383 distinct residential mortgage products in the last 12 months where CCJs/defaults are allowed.
However, you won’t typically find these specialist products on the high street, and certainly won’t find them by clicking on comparison sites.
The vast majority of these mortgages, such as Atom’s Near Prime range, are only available through mortgage advisers and for good reason – while a high street bank may turn you down for one missed payment, a good adviser knows exactly which specialist lenders will look at your individual circumstances, look beyond a credit score, and say ‘yes’.
If you have a credit problem, don’t rule yourself out of a mortgage, instead reach out to an advisor who understands the market.
Rebecca Wilkins is the founder Cutting-edge mortgages
