What credit score do I need for a mortgage?
Reading time 6 minutes
At a glance:
A mortgage lender will look at lots of information about you, including your credit history, when deciding whether to offer you a mortgage.
This information may be used to calculate a credit score, which helps the lender decide how likely you are to keep up with your mortgage payments.
There isn’t a specific score that you need to be accepted – lenders will look at lots of different things when deciding to give you a mortgage or not.
What is a credit score and how do you check it?
Lenders can use your credit history, along with the information you give as part of your application, to understand if you can borrow money and then repay it, in full, on time.
If you’ve borrowed money in the past and repay it, this make lenders more comfortable to lend to you again.
Having a higher score can mean there are more credit products available to you such as credit cards, loans, and mortgages. It can mean you may be offered a lower interest rate too.
How can I check my credit score?
You can check your credit score using any of the main credit agencies:
Experian
ClearScore
Equifax
A lender will use a different approach to decide whether to offer a mortgage. The score from a credit agency gives you an idea of how your credit history could be viewed.
Does a low credit score mean I won’t get a mortgage?
Lenders will look at lots of things when deciding whether to offer a mortgage. Just because one lender says no, it doesn’t mean you will always be turned down.
What else will a lender look at?
A lender will look at lots of factors when making the decision, not just your credit history. They will look at:
How much you earn.
What you need to pay for each month.
Any debt you may have.
The amount you have in savings.
How big your deposit is.
Who are you buying with – if it’s a joint mortgage. Getting a mortgage with a partner with a poor credit history can make it harder to be accepted for a mortgage.
Types of credit check
There are two levels of credit check, a soft and a hard check.
A soft credit check
This is a search that gives enough information for a lender to decide whether you could be successful in a full application. They also help towards checking your identity.
Soft credit checks don’t leave a trace on your credit history and other companies can’t see they have been carried out.
A hard credit check
This happens when a company wants a complete view of your credit history. Hard credit checks leave a record of their search.
A lender can see all the other hard checks that have been carried out. If there are lots of hard credit checks in your history, this could be a warning sign that you are trying to borrow money from lots of different lenders.
Does a Decision in Principle affect your credit score?
No, not with YBS it doesn’t.
When you get a Decision in Principle with us, we perform a soft credit check, so this won’t show up on your credit history or change your score.
When you complete the full mortgage application, a hard credit check is carried out. This will show up on your credit history.
Does your credit history include any of these?
These are some of the reasons your credit check may not look as attractive as it could to a lender.
Having little or no credit history.
There may in inaccuracies on your credit history.
You aren’t registered to vote at your current address.
You have moved address a lot.
You have a County Court Judgement against you.
You haven’t kept up repayments to other credit agreements like late or missed payments.
You already have a lot of credit agreements in place.
You have made a lot of applications for credit.
You have overspent on agreed credit limits.
You are financially linked to someone who has a poor credit score.
How do I improve my credit score?
Before you apply for a mortgage it’s worth looking at your credit score and seeing how you can improve it.
Here are ways you keep your credit history healthy:
Check for inaccuracies on your credit history and report them.
Build a credit history. For example, keeping up to the repayments on a phone contract can help build a positive credit score.
Register to vote.
Make sure you have been at one address for at least 3 years.
A County Court Judgement lasts for 6 years on your credit score, wait until it’s passed.
Keep up repayments and make sure they are on time every time.
Don’t make lots of application for credit in a short time.
The content on this page is for reference. It is not financial advice. For help with money issues, try MoneyHelper.
