Credit matters less to private lenders than to banks, but it is rarely ignored. Some programs have no minimum score and others set a floor, and most still look at your report. The property, the equity and your exit plan carry the file.
Search for a private mortgage with bad credit and you will find two promises: "no credit check" and "credit doesn't matter". Neither is quite true, and the gap between the promise and the reality is what this guide is about. Private lenders do look at credit differently from banks. But they still look. This is part of our wider guide to how private lenders differ and what to ask, and it focuses on one question: what do private lenders actually look at when your credit is not perfect?
Credit matters less to private lenders than to banks, but it is rarely ignored. About a third of the programs we work with say they have no minimum credit score. Others set a floor, commonly somewhere in the 500 to 680 range, and some adjust the price for weaker credit. Most still look at your credit report. What carries the file is the equity in the property and a clear plan to repay or refinance.
A bank lends mainly against your income and credit history, and it applies a fixed set of ratios and a minimum score. A private lender lends mainly against the property. If the borrower cannot repay, the lender relies on selling the property, so the question is how much equity there is and how easily the property could be sold. That is why a private lender can approve a file a bank declined. For the wider comparison, see private lender vs. B-Lender vs. bank.
It usually means there is no minimum score, not that nobody looks at your credit. Many lenders still ask for a credit report when you apply, because it shows how you have handled debt and whether there are issues such as collections, judgments or arrears. The report may change the price or the conditions rather than decide yes or no. If a lender tells you there is no credit check at all, ask how they assess risk and get the terms in writing.
1. No minimum score. Some programs welcome low or no scores, and some list past bankruptcy or a consumer proposal among the situations they will consider. The decision rests on the property, the equity and the plan.
2. A floor, often a modest one. Other programs set a minimum, commonly in the range of about 500 to 680, and it can differ by product, by loan-to-value and by whether the mortgage is a first or a second. Below the floor the file may not qualify, even with plenty of equity.
3. A price adjustment. A few lenders add to the rate or the fee when credit is weaker, for example a small premium for a score in a middle band. Weaker credit does not always mean a no. Sometimes it means a higher price.
This is where lenders differ most. Some programs list insolvency, a past bankruptcy or a consumer proposal as situations they will consider. Others exclude recent bankruptcies, active consumer proposals, mortgage or property tax arrears, or a property already under power of sale, or they require collections to be paid from the proceeds. If any of these apply to you, tell your agent early, because it narrows the list of lenders. For more on recovery after a bankruptcy, see rebuilding credit after bankruptcy: a realistic timeline.
Many lenders that are flexible on credit are also flexible on income. In a lot of programs there are no debt-service ratios and no stress test, and borrowers can document income with bank statements or a stated-income declaration. If you are self-employed or your income is hard to prove, that flexibility is often the bigger factor than the score. See why banks decline self-employed borrowers.
The property. Location, type and condition all matter, and some lenders limit lending to certain areas or property types, such as larger towns or standard residential properties. The equity. The more of the property's value that is not already borrowed against, the more options you have. The exit plan. Private mortgages are short. Lenders want to know how you will repay or refinance, and some weigh this heavily.
Even where credit is not a barrier, it can affect the price and the structure: a higher rate, a higher fee, a lower maximum loan-to-value or a shorter term. We cover the fee side in what you actually receive and owe on a private mortgage. The cost of a private mortgage is higher than a bank's, so it works best as a bridge. Our credit rebuilding page explains how borrowers use B-Lender mortgages to move back to lower-cost financing.
Ask whether there is a minimum score, and whether it changes the rate or the loan-to-value. Ask whether a credit report will be pulled, and what you can do about issues such as collections or arrears. Ask whether a past bankruptcy or an active consumer proposal limits your options. And ask what the exit plan needs to look like, and what happens at the end of the term.
Bad credit does not rule out a private mortgage, but it does change the conversation. Expect your credit to be looked at, expect the property and your plan to carry the file, and expect the lender list to depend on your history. If you would like to know which programs might fit your situation, contact us and we will walk through the options. This article is general information as of October 2026, not legal, tax or mortgage advice, and lender terms vary and change without notice.
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