What "asset-led" actually means
Most mortgage lenders use credit scoring to decide whether to lend. Your credit file generates a score, the score is compared against a threshold, and the answer is yes or no. A CCJ from three years ago or a missed payment from last year can trigger an automatic decline regardless of how strong the property transaction is.
Bridging lenders work differently. The primary security is the property — not the borrower's income or credit history. The loan is repaid from the sale proceeds or a refinance, not from monthly income. For these reasons, bridging lenders can take a more holistic view of adverse credit: when did it happen, what caused it, is it resolved, and does the exit strategy still make sense in light of it?
At AF Credit, the three things that drive our lending decision are:
- The property — type, condition, location, and open market value
- The LTV — the buffer between what we lend and what the property is worth
- The exit — sale or refinance, and how credible it is in light of the borrower's full situation
Adverse credit is a factor. It is not a veto.
- County Court Judgments (CCJs) — satisfied or unsatisfied, depending on amount and age
- Defaults on credit cards, loans or utilities
- Mortgage arrears — historic, where the mortgage has since been managed
- IVA (Individual Voluntary Arrangement) — completed or discharged
- Bankruptcy — discharged, typically minimum 12 months post-discharge
- Newly self-employed — no adverse per se, but insufficient income history for standard lenders
- Mixed credit profile — good overall with one or two legacy issues
Each case is reviewed individually. Disclosure of all adverse credit is required at application — non-disclosure is not an option.
Case study — Hull, East Yorkshire: adverse credit, 85% LTV, completed in 16 days
A limited company — directed by an experienced contractor — identified an end-terrace bungalow in Hull available via Modern Method of Auction for £47,000. The director had adverse credit from an earlier period. Previous lenders had quoted terms, taken upfront fees, and failed to deliver.
AF Credit assessed the transaction on its merits:
- Clear works plan with a credible refurbishment budget (~£10,000, self-managed)
- Estimated GDV of £85,000 following refurbishment
- Exit strategy: sale, supported by the existing property portfolio
- AVM valuation on the standard residential property — no upfront fee
- All costs rolled into the gross facility — £0 required upfront by the borrower
The loan completed in 16 days from first enquiry, meeting the borrower's contractual deadline. The full case study is at Adverse Credit Refurbishment Bridging Loan — Hull.
How adverse credit affects bridging loan terms
Adverse credit is one of several factors that inform the LTV and rate we can offer — it is not binary. The variables that matter most are:
| Adverse credit type | Age | Likely impact on terms |
|---|---|---|
| Minor CCJ (satisfied) | 2+ years ago | Often no impact on rate; case-by-case |
| CCJ (unsatisfied) | Recent | Lower max LTV or rate loading; depends on amount |
| Defaults (satisfied) | 1–3 years ago | Manageable with strong property and exit |
| Historic mortgage arrears | Resolved | Acceptable where exit does not rely on standard remortgage |
| Discharged bankruptcy | 12+ months post-discharge | Considered case-by-case; sale exit preferred |
| Newly self-employed | N/A | No impact on bridging terms — non-status lender |
Exit strategy with adverse credit
The exit strategy requires additional care where adverse credit is a factor. The two common exits are sale and refinance — and they carry different risk profiles for adverse credit borrowers:
- Sale exit — the most straightforward for adverse credit borrowers. The property is sold at the end of the project; the bridging loan is repaid from the sale proceeds. No credit assessment at exit — just a buyer and a completion.
- Refinance exit — requires a mortgage lender to approve the borrower at the end of the bridge term. If the adverse credit will still be visible at that point, the refinance may not be achievable. This makes the exit strategy less credible unless the adverse entries are due to expire or be removed.
For borrowers with significant adverse credit, AF Credit will discuss the exit strategy in detail before offering. It is better to structure the exit correctly at the outset than to discover six months later that refinance is unavailable.
Frequently asked questions
Yes. AF Credit is an asset-led lender and assesses applications on the property, the LTV, and the exit strategy rather than relying on credit scoring alone. CCJs, defaults, missed payments and discharged bankruptcy are all considered individually.
Yes. A CCJ does not automatically prevent a bridging loan. AF Credit reviews when it was registered, the amount, whether it is satisfied, and the overall strength of the property transaction. Individual assessment, not automated credit scoring.
It may. Minor or historic adverse credit on an otherwise strong transaction often has no impact. Significant recent adverse credit — recent unsatisfied CCJs, undischarged bankruptcy — may reduce the maximum LTV available. AF Credit will be clear about what is available before you commit.
No — you should obtain indicative terms before bidding. AF Credit can issue a Decision in Principle before auction day based on the property and your circumstances. From the moment the hammer falls you are legally bound to complete. Do not bid on borrowed confidence.
AF Credit does not charge upfront valuation fees where AVM is used. The arrangement fee is rolled into the gross facility. The Hull case study borrower had been let down by previous lenders who charged upfront and failed to complete — AF Credit completed in 16 days with £0 required upfront.
Full disclosure is always better than a lender discovering adverse credit during due diligence. AF Credit reviews the full picture and gives you a clear decision — no surprises at the last minute. 01451 514 563 or get a quote below.