Bad credit can make applying for a mortgage feel more complicated, but it does not automatically mean you cannot get a CIS mortgage. While some lenders may have stricter criteria, others are willing to consider applicants with bad credit, particularly if other parts of their application are strong.
At Jones & Young, we regularly help CIS workers and contractors explore their mortgage options. We understand that every mortgage application is different, and lenders will usually look at much more than your credit score. Your income, deposit, employment history and overall financial situation can all play a part in the decision.
In this guide, we explain how a CIS mortgage with bad credit works, what mortgage lenders look for, how much deposit you may need and what steps could improve your chances of securing a mortgage with bad credit.
What Is a CIS Mortgage?
A CIS mortgage is designed for people who work under the Construction Industry Scheme (CIS). Many construction workers and contractors are registered under the scheme, where tax is deducted from their payments before they receive their earnings.
Although many CIS workers are classed as self employed for tax purposes, some mortgage lenders assess their CIS income differently from other self-employed applicants. Rather than relying solely on net profit or tax calculations, some CIS mortgage lenders may use your gross income when assessing affordability. This can give a clearer picture of what you earn.
Instead of traditional accounts, lenders may ask for:
- CIS payslips or CIS statements
- Bank statements
- Proof of your gross CIS income
Like any other mortgage, eligibility depends on several factors, including your income, credit history, deposit and the lender’s own criteria. While not all lenders offer CIS mortgages, there are specialist lenders that understand construction industry scheme mortgages and may be able to offer more suitable options.
If you’d like to learn more, read our complete guide to CIS mortgages for a more detailed explanation.
Can You Get a CIS Mortgage With Bad Credit?
Yes, it is possible to get a CIS mortgage with bad credit, although your options may be more limited. Having bad credit does not automatically mean you’ll be declined, as every mortgage lender has its own lending criteria and will assess your circumstances individually.
Some lenders may be more cautious if you have adverse credit, a poor credit score or previous credit issues. Others, including specialist lenders, are often more willing to consider applications from CIS workers, particularly if your finances have improved since the credit problems occurred.
When reviewing a mortgage application, lenders will usually look at more than just your credit score. They may also consider:
- Your gross income and affordability
- Your employment history
- Your deposit
- Your recent credit history
- Whether you’ve kept up with recent financial commitments
If you’re looking to get a CIS mortgage with bad credit, speaking with a specialist mortgage broker can help you find lenders that are better suited to your circumstances and reduce the chance of making unnecessary applications.
How Lenders Assess a Mortgage Application?
When assessing a mortgage application, lenders want to understand whether you can comfortably afford the repayments. While your credit score is important, it is only one part of the decision.
For a mortgage with bad credit, lenders may look at factors including:
- Your gross income and overall affordability
- Your CIS payslips and recent earnings
- Bank statements
- Your credit report and credit history
- Any previous missed payments or adverse credit
- Your deposit and the amount you want to borrow
Some lenders may also ask for business accounts or tax returns, depending on your circumstances and how your income is received.
If you’ve experienced bad credit in the past, lenders will often look at the bigger picture. They may consider when the issue happened, whether your financial situation has improved and how you’ve managed your finances since. This means applications are often assessed on a case by case basis, rather than based on a single factor alone.
Every lender has its own criteria, so being declined by one provider does not necessarily mean another lender will reach the same decision. A mortgage broker with experience of CIS mortgages can help identify lenders that are more likely to consider your application.
How Much Deposit Do I Need for a CIS Mortgage With Bad Credit?
There is no set answer to how much deposit you will need, as every lender has its own criteria. The size of your deposit will usually depend on your financial circumstances, credit history and the type of property you want to buy.
If you’re applying for a mortgage with bad credit, a larger deposit may improve your chances of being accepted. This reduces the lender’s risk and could increase the number of mortgage products available to you. In some cases, it may also help you access more competitive interest rates.
If you’re unsure what deposit do I need, a specialist broker can explain the options available based on your individual circumstances.
How Much Could You Borrow?
Your borrowing power will depend on several factors, including your annual income, existing financial commitments and the lender’s affordability checks.
For a CIS contractor, many lenders may calculate affordability using gross income rather than net income, provided they accept CIS payslips as proof of earnings. This can sometimes increase your borrowing potential compared with using taxable income alone.
Many lenders may offer up to around 4.5 times your annual income, although this varies between providers and is never guaranteed. Your credit score, deposit, mortgage repayments and overall financial situation will also influence how much you can borrow.
Speaking with a mortgage broker can help you understand your borrowing options and identify a suitable mortgage for your circumstances.
Tips Before You Apply for a Mortgage With Bad Credit
Taking a few simple steps before you apply can strengthen your mortgage application and help you prepare for conversations with lenders. While these steps cannot guarantee approval, they may improve your chances of securing a mortgage with bad credit.
Check Your Credit Report
Review your credit report before applying to make sure the information is accurate. If you spot any errors, contact the relevant credit reference agency and have them corrected. It’s also worth checking for any old credit issues that may have already been resolved.
Improve Your Credit Score
If possible, pay bills on time, reduce outstanding debt and avoid making several credit applications within a short period. Registering on the electoral roll can also help strengthen your credit score over time.
Keep Your CIS Documents Up to Date
Lenders will usually want to see recent CIS payslips, bank statements and proof of your income. Having these documents ready can help your application progress more smoothly.
Speak to a Specialist Mortgage Broker
A specialist mortgage broker can help you find CIS lenders that understand your circumstances. They can also recommend the right lender and help you apply for the best mortgage deal based on your individual circumstances.
Jones & Young: CIS Mortgage Advice for Bad Credit Applicants
At Jones & Young, we help CIS contractors, CIS workers and self-employed applicants find the right mortgage for their circumstances. We understand that every application is different, particularly if you have bad credit or a more complex income structure.
Our team works with a wide range of lenders, including those who offer bad credit mortgages, and can help identify mortgage products that may suit your needs. From comparing your options to supporting you through the mortgage application process, we’re here to make finding a CIS mortgage with bad credit as straightforward as possible.
If you’d like mortgage advice, contact us today. We’ll take the time to understand your circumstances and help you explore the options available.
CIS Mortgage With Bad Credit FAQs
Below are some of the most common questions people ask about CIS mortgages and bad credit.
Can I get a CIS mortgage with bad credit?
Yes, it may still be possible to get a CIS mortgage if you have bad credit. Every lender has different criteria, and some are more willing to consider applicants with previous credit issues than others. Your income, deposit and overall financial situation will also be taken into account.
Do all CIS mortgage lenders accept bad credit?
No. Some CIS mortgage lenders have stricter lending criteria than others. If you’ve experienced adverse credit, speaking with a broker can help you identify lenders that may be more suited to your circumstances.
Can CIS payslips be used instead of accounts?
Some lenders will accept CIS payslips or CIS statements as evidence of income rather than asking for traditional accounts. The documents required will vary depending on the lender and your individual circumstances.
Will missed payments stop me getting a mortgage?
Not necessarily. Missed payments can affect your application, but they do not automatically prevent you from getting a mortgage. Lenders will often consider when they occurred, how serious they were and whether your financial situation has improved since then.
Can a larger deposit improve my chances of getting a mortgage?
In many cases, yes. A larger deposit reduces the amount you need to borrow, which may improve your chances of securing a mortgage and increase the range of products available, depending on the lender’s criteria.
