What credit score do I need to have a mortgage?
Unfortunately, mortgages aren't simple, there is no specific credit score you will need to obtain a mortgage. Lenders typically have their own criteria for what they are willing to accept. When you make an application for a mortgage, lenders work out a credit score for you.
Typically, lenders who are more flexible with previous credit issues such as late payments or CCJs tend to offer more expensive interest rates, whereas lenders who are not so flexible tend to offer the cheapest interest rates on the market.
How can getting a copy of your credit report help you?
Obtaining a copy of your credit report before looking for a mortgage will help you understand if there are any issues you may need to be aware of before starting your property search.
The UK has three main credit reference agencies to show you the details they store about you.
It is important when looking at your credit file to correct anything that may be incorrect. Even minor spelling mistakes in your details can cause problems. Each credit agency works out your score differently, so checking all three can be beneficial.
What if my credit score is poor?
Mortgage lenders want to know if you can keep up to date with mortgage repayments, and they will typically use your credit report to understand how you have handled monthly repayments previously.
Getting a mortgage for bad credit is by no means impossible, but it may be more difficult and is likely to mean you may have to look at more expensive interest rates and need a large deposit.
Improve your credit score for a mortgage application
One of the most important factors anyone can do before looking for a new mortgage is to make credit payments on time. This ensures you avoid having any missed or late payments on your credit file.
Some additional tips for improving your credit score are as follows:
- Registering to vote, being on the electoral register helps mortgage lenders confirm who you are and where you live
- Keep your credit limits low, keeping credit limit balances at 25% or less of your overall credit limit, this will show the mortgage lender you are not heavily reliant on unsecured debt.
- Avoid when possible applying for multiple credit accounts. Too many credit searches may suggest to the mortgage lender you’re overly reliant on credit.
And don’t forget to check your credit report to make sure the information on it is accurate and up-to-date - even a small mistake on your credit report could have a big impact on your mortgage application.
More questions?
Why not discuss with our expert mortgage advisers who specialise in bad credit mortgages, get in touch today on 0345 066 6555 and we will be more than happy to help.
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Frequently asked questions...
Will past credit problems such as CCJ's or defaults affect my choices when looking for a mortgage?
Will past credit problems such as CCJ's or defaults affect my choices when looking for a mortgage?
Yes, unfortunately they will, and you may not be able to access products from certain lenders. However, some lenders will allow previous credit problems and are happy to lend to clients even with previous repossessions, IVAs or even bankruptcy.
Our specialist mortgage brokers have access to a wide range of lenders across the market. This includes mortgage providers specifically lending to people that have had issues with credit in the past. We can't guarantee you'll always get what you're looking for, but we'll be there to support you every step of the way.
What is a Credit Score?
What is a Credit Score?
Your credit score acts as a way of showing how good you are at managing your personal finances and credit repayments. Lenders will calculate their own score and use it to decide whether they should or shouldn't lend you money based on their lending criteria.
I have had some previous issues with my credit history. Will I/we have a mortgage that is a higher rate for 25 years?
I have had some previous issues with my credit history. Will I/we have a mortgage that is a higher rate for 25 years?
Not at all. We regularly review your circumstances and look to get you into a better mortgage rate as soon as possible.
Our specialist mortgage brokers are always on hand to review your circumstances and offer you a competitive rate that meets your circumstances.
