Best Lenders for Self-Employed with Bad Credit
Get approved with 580-680 credit scores. No tax returns required. Bank statement loans, DSCR loans, and alternative programs for self-employed borrowers with credit challenges.
Being self-employed with less-than-perfect credit can feel like a double penalty when applying for a mortgage. Traditional lenders are already skeptical of self-employed income, and add bad credit to the mix? Most won't even talk to you.
But specialized lenders exist specifically for this situation. They offer bank statement loans and DSCR loans that focus on your current income and business cash flow rather than your credit history. While you'll pay slightly higher rates, you CAN get approved—even with credit scores as low as 580.
What to Expect by Credit Score
Credit Score: 580-619
Lenders: CrossCountry Mortgage
💡 Tip: Expect higher rates and larger down payments. Focus on improving credit to 620+ for better options.
Credit Score: 620-659
Lenders: Angel Oak, FNBA, Griffin, CrossCountry
💡 Tip: Sweet spot for non-QM loans. Many lenders will work with you. Shop rates aggressively.
Credit Score: 660-679
Lenders: All lenders + Capital Bridge
💡 Tip: You qualify for most programs. Rates approach conventional. Consider waiting if close to 680.
Credit Score: 680+
Lenders: All lenders, best rates
💡 Tip: You're in great shape. Should get competitive rates even without tax returns.
Top Lenders for Bad Credit + Self-Employed
CrossCountry Mortgage
CrossCountry is one of the few lenders actively approving self-employed borrowers with credit scores as low as 580. They offer bank statement loans and alternative documentation programs specifically designed for credit-challenged self-employed professionals.
✅ Pros
- • Accepts 580 credit score
- • Bank statement loans available
- • National lender with local offices
- • Flexible underwriting
- • Multiple bad credit programs
❌ Cons
- • Higher rates for lower credit
- • 25-30% down for sub-620 credit
- • Longer approval times
- • More documentation required
Best for: Self-employed with 580-620 credit
Angel Oak
Angel Oak offers multiple non-QM loan programs for self-employed borrowers with credit challenges. Their bank statement loans are particularly flexible for borrowers with 620-660 credit who can't qualify conventionally.
✅ Pros
- • 620 minimum credit score
- • 12 or 24 month bank statements
- • Asset depletion loans available
- • P&L statement options
- • Competitive rates for non-QM
❌ Cons
- • Not available in all states
- • Smaller lender, limited capacity
- • Higher rates than conventional
- • Strict documentation requirements
Best for: 620-660 credit with complex income
FNBA (First National Bank of America)
FNBA specializes in non-QM loans for self-employed borrowers who don't fit conventional boxes. They're particularly flexible with high debt-to-income ratios and recent credit issues.
✅ Pros
- • DTI up to 50%
- • Recent credit events OK (12+ months)
- • Bank statement loans
- • DSCR loans available
- • Fast approval process
❌ Cons
- • 620 minimum (no exceptions)
- • Higher rates for recent credit issues
- • 20% down minimum
- • Limited to certain states
Best for: High DTI or recent credit issues
Griffin Funding
Griffin Funding's bank statement loans work well for self-employed borrowers rebuilding credit. They focus on current income and assets rather than past credit issues.
✅ Pros
- • 620 minimum credit
- • 12 month bank statements
- • Lower down payments (10-15%)
- • Primary residence OK
- • Rate discounts for higher credit
❌ Cons
- • Income calculated conservatively
- • More documentation than DSCR
- • Reserves required
- • Primarily CA, FL, TX
Best for: 620-680 credit, primary residence
Capital Bridge Solutions
While Capital Bridge has a higher minimum credit score, their DSCR loans are perfect for self-employed investors with credit in the 640-680 range. No income verification makes approval much easier.
✅ Pros
- • No tax returns or income docs
- • Fast 24-48 hour approval
- • 640 credit minimum
- • Investment properties only
- • Competitive rates for DSCR
❌ Cons
- • 640 minimum (not 580-620)
- • Investment properties only
- • 20-25% down required
- • Property must cash flow
Best for: 640+ credit, investment properties
How to Improve Your Credit Score
While you can get approved with bad credit, improving your score even 20-40 points can save you thousands per year in interest. Here are the fastest ways to boost your credit:
Pay Down Credit Cards
Get credit utilization below 30% (ideally under 10%). This is the fastest way to boost your score.
Dispute Errors
Check all three bureaus for errors. Dispute anything incorrect. Errors are more common than you think.
Become Authorized User
Get added to someone's old, well-managed credit card. Their positive history can boost your score.
Pay Collections
Some lenders want collections paid or settled. Negotiate pay-for-delete if possible.
Wait for Negatives to Age
Recent late payments hurt more. Lenders are more forgiving of issues 12+ months old.
Frequently Asked Questions
What's the minimum credit score for self-employed loans?
CrossCountry Mortgage accepts 580 for self-employed borrowers, though you'll need 25-30% down and rates will be 8-9.5%. Most lenders want 620+ for bank statement loans. DSCR loans typically require 640-660 minimum. The higher your score, the better your rates and terms.
Can I get approved with a recent bankruptcy or foreclosure?
Most lenders want 2-3 years after bankruptcy (Chapter 7) or foreclosure. Chapter 13 can sometimes qualify after 12 months of payments. DSCR loans are more forgiving since they don't verify personal income or credit history as heavily.
How much will bad credit cost me?
Expect to pay 1-2% higher interest rates compared to good credit. On a $500K loan, that's $5,000-$10,000 per year in extra interest. Plus you'll likely need to put more money down (20-30% vs 10-15%).
Should I wait to improve my credit first?
Depends on your timeline. If you're at 615 and can get to 640 in 3-6 months, probably worth waiting—you'll save $5K-10K/year. If you're at 585 and need 2+ years to hit 640, might make sense to buy now and refinance later.
Will applying hurt my credit score?
Multiple mortgage inquiries within 45 days count as one inquiry. So shop around! The initial credit check will ding you 5-10 points temporarily, but it recovers in 3-6 months.
Can I refinance later when my credit improves?
Yes! Many borrowers with bad credit use non-QM loans to buy, then refinance to conventional once their credit improves. Just make sure your loan doesn't have prepayment penalties.
Compare All Self-Employed Lenders
See our complete comparison of the top 10 lenders for self-employed borrowers in California, including options for all credit tiers.
View Complete GuideDon't Let Bad Credit Stop You
Get pre-qualified in 24-48 hours. Lenders that specialize in self-employed borrowers with credit challenges. No judgment, just solutions.