If you have only traded for a year, or your second year’s figures are not finalised yet, you have less evidence than the 2 years many lenders prefer, and that gets harder still alongside a credit issue. Some lenders will consider 1 year of accounts or an SA302, but fewer of them are also comfortable with adverse credit, so the choice of lender narrows quickly.
This page focuses on what changes when you only have one full year to show. For the wider picture on self-employed income evidence, see our main page on self-employed bad credit remortgages.
On this page
This page covers
- Employment
- Self-employedLenders commonly ask for tax calculations and accounts covering one or more years.
Read the main guide: Remortgaging when you are self-employed and have bad credit
In short
- Some lenders consider 1 year of accounts or an SA302, though most prefer 2.
- A shorter trading history combined with adverse credit is one of the harder combinations, but not automatically ruled out.
- Extra evidence, such as bank statements and forward contracts, can help support a single year’s figures.
- Waiting for a second year’s accounts, if your deal end date allows it, can open up more lenders.
Why do lenders usually ask for 2 years?
Two years of figures let a lender see a trend rather than a single snapshot, and check that income is not a one-off. A first year can be unusually strong, for example if it includes a large one-time contract, or unusually weak while a business finds its footing, so lenders that only look at 1 year are taking on more uncertainty and tend to set their own conditions around it.
Where a lender does accept 1 year, it will still normally want the figures fully finalised: a completed SA302 and matching tax year overview, or full accounts, rather than management figures you have prepared yourself.
What extra evidence can help with a single year?
- Business bank statements, going back further than your accounts, to show a consistent pattern of income arriving.
- Evidence of what you did before, if you moved from employment into self-employment in a related field, since some lenders take this into account.
- Confirmed forward work, such as signed contracts or a pipeline of bookings, where relevant to your trade.
- An accountant’s reference, particularly from a member of a recognised professional body.
None of this replaces the core requirement of a completed year’s figures, but it can help an adviser present a fuller picture when approaching a lender that only has one year of tax documents to go on.
How does adverse credit change things with only 1 year of figures?
| Situation | What it may mean |
|---|---|
| 1 year’s accounts, older or satisfied credit issue | A narrower but still workable field of lenders, subject to the specifics. |
| 1 year’s accounts, recent or unsatisfied credit issue | One of the harder combinations; fewer lenders are likely to consider both together. |
| 1 year’s accounts, falling income during that year | Likely to be looked at closely; see our page on falling income. |
General information only, not a promise of what any lender will offer. Every application is assessed individually.
If your credit issue happened around the same time you became self-employed, for example during the transition when income was unsettled, it can help to explain that link directly rather than leave a lender to guess at it.
Would waiting for a second year help?
If your current deal is not ending soon, waiting until you have a second full year’s figures can open up more lenders, particularly if the second year shows growth. This needs weighing against how long you can comfortably stay on your existing arrangement, or your lender’s standard variable rate if the deal has already ended.
- Ask your accountant how soon your next SA302 and tax year overview could be finalised.
- Check your current deal end date and any early repayment charges before deciding to wait.
- Keep business and personal bank statements organised in the meantime.
- Continue paying existing credit commitments on time, since this can only help while you wait.
What may affect options with only 1 year’s accounts
| Factor | Why it matters |
|---|---|
| Whether the year is fully finalised | A completed SA302 and tax year overview, or full accounts, rather than management figures. |
| Strength and consistency of the figures | Whether income looks sustainable rather than a one-off high or low year. |
| Relevant prior experience | Some lenders take into account previous employment in the same field before you became self-employed. |
| Age and status of the credit issue | How recent and how serious, and whether it overlaps with your first trading year. |
| Bank statement evidence | Business account activity that supports the figures in your accounts or SA302. |
| Time until your deal ends | Whether there is scope to wait for a second year’s figures without moving to a higher standard variable rate. |
| Loan to value | A lower LTV can help offset the extra uncertainty a lender takes on with only 1 year of figures. |
These are general points, not lender rules. Each lender sets and changes its own criteria.
Information an adviser may ask for
You don’t need all of this to make an enquiry. It helps to know where to find it, because an adviser is likely to ask about most of it.
- Your finalised SA302 and tax year overview, or full first-year accounts
- Business and personal bank statements
- Details of any relevant employment before you became self-employed
- Signed contracts or confirmed forward bookings, where relevant
- Your accountant’s details and professional body membership if they have one
- Your credit reports from Experian, Equifax and TransUnion
- Your current deal end date and any early repayment charge details
Frequently asked questions
Can I remortgage with only 1 year of accounts and bad credit?
It may be possible, but it is one of the harder combinations. Some lenders consider 1 year of figures, and some consider adverse credit, but fewer do both. More equity, and a credit issue that is older or settled, can help. An adviser can check which lenders may consider your figures before any application is made.
Do I need 2 years of accounts before I even try?
Not necessarily. It depends on your deal end date, how strong your first year looks, and how recent your credit issue is. Some people are better served by trying now with a lender that accepts 1 year; others by waiting for a second year’s figures.
Does my previous employment count for anything?
Some lenders take into account relevant experience before you became self-employed, particularly if you moved into a similar trade or profession. It is not guaranteed to help, but it is worth mentioning to an adviser.
What if my first year included a one-off large contract?
Mention this clearly. A single unusually large payment can make one year’s figures look stronger than your ongoing income really is, and a lender or adviser will want to understand whether it is repeatable.