What Credit Score Do I Need For A Mortgage?

Good question! A credit score or rating is a digital footprint of your financial self, whether it’s good or bad all lenders consider your credit history when applying for a mortgage.

Before we go straight in lets explore what a credit score is.

What is a credit score?

If a stranger walked up to you and asked to borrow £1000, would you hand over the money with just their word that they would repay? Or would you like to check that they’ve successfully repaid loans in the past and reliably made payments each month? Of course, you would! Well, the lenders want to know this about you and they check by looking at your financial history – your credit file.

The information that makes up your credit file is recorded by all banks, councils, loan providers, utility companies and courts so there’s no way to hide it. This is why it’s such a trusted source of information for mortgage lenders.

There are three main agencies that are used to record credit file information:

  • Experian
  • Equifax
  • Trans Union

To understand your credit file, ideally, you’ll want to see the information held with all three agencies. An easy way to do this is to use a company called ‘Check My File’ who can pull reports from all three for you. Most agencies either offer a free service or a free trial period, making it really easy to get hold of the financial information that’s recorded about you.

So how is credit a score calculated and what can you expect to see in these files?

Credit score

This is a number given to you by the provider, normally up to 999. The higher the score, the better the credit rating. Now, if you don’t have a great credit score, don’t panic. Your credit score is not the only factor used to make a decision about the mortgage. In fact, even if you were in the red section, you could still apply for mortgage lending.

What makes up your credit score?

Your credit score is made up of a mixture of things, including your payment history, the number of debts, the amount of debts, registered addresses, and any adverse credit information such as payment defaults and County Court Judgements (CCJs).

How long does information stay on your credit file?

A whole 6 years! Wowsers! So, if you were late making your credit card payment because you hadn’t set up the standing order, that will show up on your credit file for the next 6 years. This is why you should take all the steps needed where possible, to reduce the risk of any financial hiccups.

So you might have guessed, managing your credit file is really important, so here are our 3 top tips to make sure it’s as good as it can be!

1. Don’t miss your payments: where possible, set up standing orders, direct debits or reminders so that your payments are made on time, every month.

2. Update your address: Are you registered to vote and is your address up to date with all your providers?

3. Spend wisely: It’s great to have a credit card and access to cash when it’s needed most, but don’t abuse this facility. Keep well within your credit limits ideally owing no more than 50 – 60% of your agreed limits. Try to only have a few cards. If you have lots of cards and you’re not using them, it can be better to close them.

So back to the original question, what credit score do I need to get a mortgage?

Well as we have explored there is a lot of factors that lenders consider, not just the score out of 999 and whether that score is high or low you could still be eligible, as some lenders ignore this score all together. To make this area even more difficult, mortgage lenders regularly review their policies and each lender has a different set of factors they consider. So in any case, until you actually apply for your mortgage, you don’t know if you’re going to be accepted or not.

So really, the best thing you can do is to get hold of your credit report, ideally from those mentioned earlier and approach a mortgage adviser, as they will be able to let know, which lender might be best suited to your circumstances.

We hope you found this article useful and should you wish to speak with an actual human about your credit file, our team would be delighted to speak to you. Just give us a call on 0333 242 3863, alternatively, you can fill out our online enquiry form, and we’ll be in touch.

We wish you all the best with your mortgage application.

Written by Mark Travell, Director of Robin Mortgage Design

#CreditScores #FirstTimeBuyers #MortgageAdvisers


Now it’s time for the legal bit: YOUR HOME BE RESPOSSESSED IF YOU DO NOT KEEP UP TO DATE WITH YOUR MORTGAGE PAYMENTS

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The information in this blog is only valid for the date it is written.