Divorce can put pressure on household finances.

Bills may need to be covered separately, joint accounts may need to be untangled and missed payments can sometimes occur while financial arrangements are being resolved.

If your credit history has been affected, you may be concerned that getting a mortgage will no longer be possible.

Bad credit can affect mortgage capacity, but the impact depends on what happened, when it happened and your wider financial position.

What do lenders look at in your credit history?

Lenders use your credit history to understand how you have managed borrowing and financial commitments.

They may look at:

• Missed or late payments
• Defaults
• County Court judgments
• Individual voluntary arrangements
• Bankruptcy
• Outstanding debts
• Credit card balances
• Recent credit applications
• Whether you are registered on the electoral roll

Not every issue carries the same weight.

A single missed payment several years ago is different from recent or repeated problems.

Can joint finances affect your credit position?

Marriage or living together doesn’t automatically join two credit files.

However, joint financial products can create a financial association between you and your former partner.

These may include:

• A joint mortgage
• A joint bank account with an overdraft
• A joint loan 
• Shared credit agreements 

If payments are missed on a joint commitment, both people’s credit histories may be affected, regardless of who was expected to make the payment. 

Moving out of the property doesn’t remove your responsibility for a joint mortgage. 

Should you check your credit report after separation? 

Yes. 

Checking your credit reports can help you identify: 

• Which accounts remain open 
• Whether any payments have been missed 
• What financial associations are recorded 
• Whether your address is correct 
• Whether there are errors that need challenging 
• What debts are still shown in your name 

It’s sensible to check information held by more than one credit reference agency, as records may differ. 

If an entry is incorrect, you can contact the relevant provider or credit reference agency to ask for it to be investigated. 

Does bad credit mean you can’t get a mortgage? 

Not necessarily. 

Some lenders may consider applicants with previous credit problems, depending on: 

• The type of issue 
• How much was owed 
• When it occurred 
• Whether it has been resolved 
• The deposit available 
• Current income and expenditure 
• How finances have been managed since 

However, the choice of lenders may be smaller, and the available rate or borrowing amount may differ. 

No outcome can be guaranteed. 

Can bad credit reduce how much you can borrow? 

It may. 

Credit history is only one part of the assessment, but it can affect the products and lenders available to you. 

A lender may also take a cautious view if your current budget is already under pressure from debts, maintenance, childcare or an existing joint mortgage. 

The amount you can borrow after divorce therefore depends on more than your salary. 

It reflects the complete financial picture. 

Should you apply to several lenders? 

Making multiple full credit applications in a short period can leave several searches on your credit file. 

This may make it look as though you are relying heavily on new credit. 

Rather than applying repeatedly, it can be more helpful to understand your position first and identify what may be realistic. 

An estimate or assessment isn’t the same as a formal mortgage offer, but it can help reduce guesswork. 

What practical steps may help? 

Depending on your circumstances, practical steps could include: 

• Checking all three credit reports 
• Correcting inaccurate information 
• Making current payments on time 
• Reducing unsecured debts where realistic 
• Avoiding unnecessary credit applications 
• Closing unused joint accounts where appropriate 
• Ensuring joint commitments continue to be paid 
• Registering at your current address 

Credit problems usually cannot be repaired instantly, so be cautious of anyone promising a quick fix. 

How can a mortgage capacity assessment help? 

A mortgage capacity assessment can consider your income, expenditure, commitments and credit position when estimating what borrowing may be realistic. 

It can help you understand: 

• Whether your credit history may restrict lender choice 
• How existing debts affect affordability 
• Whether a proposed housing budget appears realistic 
• What issues may need attention before an application 
• How an existing joint mortgage affects your position 

It isn’t a guarantee that a lender will approve an application. 

It provides a clearer basis for decisions during divorce or separation. 

So, how does bad credit affect mortgage capacity? 

Bad credit can reduce the range of mortgages available and may affect the amount, rate or deposit requirements. 

But it doesn’t always mean borrowing is impossible. 

The effect depends on the type and age of the credit issue, whether it has been resolved and what the rest of your finances look like. 

If you’re dealing with divorce and are unsure how your credit history may affect your housing options, you can get in touch and talk it through with us.