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What Credit Score Do You Need for a Mortgage?

Written by Reviewed by Emma Lunn

30th Mar 2020 (Last updated on 19th Jun 2020) 6 minute read

When it comes to getting a mortgage, there isn’t a set credit score required by mortgage lenders. 

Essentially, lenders want to be pretty sure that the person taking out the loan will be able to make their monthly repayment. To ensure the person applying for the mortgage is financially responsible, lenders will run a credit. This will look into their credit history, and see if they pay both debts and bills on time.

Compare My Move has created this guide with everything you need to know about the credit checks done by mortgage lenders and how you can improve your credit score before starting your mortgage application. 

This article will cover the following:
  1. What is a Credit Score?
  2. What is Considered a “Good” Credit Score?
  3. What Credit Check Do Mortgage Lenders Use?
  4. What If My Mortgage Credit Check is Poor?
  5. How You Can Improve Your Credit Score for a Mortgage Application?
  6. Save on Your Property Purchase and Home Move with Compare My Move

What is a Credit Score?

A credit score is a numerical score that represents your creditworthiness and how trustworthy you are with money. It is a tool used by lenders to determine whether or not you qualify for a loan, such as a mortgage when it comes to buying a house.  

There’s no such thing as a universal credit score. The UK’s three credit reference agencies (TransUnion, Equifax and Experian) all produce their own scores based on the information they hold about you. The different credit agencies may hold different information about you.

Lenders may also credit score you when assessing your application for a mortgage or other type of loan. They do this using a credit check plus other information they hold about you.

A credit score takes into account your payment history (for example, payments made to a credit card), your income and outgoings, any loans you have taken out previously, if you are on the electoral register and if you have or have had debts.  

You are able to check your credit score for free via sites like Experian and the other credit reference agencies listed above. 

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What is Considered a “Good” Credit Score?

It’s important to remember that there isn’t a universal score or specific credit rating required for a mortgage. This is because there isn’t just one credit score and the exact score you need to qualify for a mortgage will vary from lender to lender. 

TransUnion has a maximum score of 710, Experian 999, and Equifax 700.

A “good” credit score with TransUnion is between 604 and 627. A score of 628 to 710 is “excellent”.

A “good” credit score with Experian is between 881 and 960. A score of 961 to 999 is “excellent”.

A “good” credit score with Equifax is between 420 and 465. A score of 466 to 700 is “excellent”.

In general, the higher your credit score, the more likely you are to be accepted for a mortgage. An excellent credit rating can make you eligible for a wider range of mortgages and better deals.

Your credit score will also affect the different types of mortgages that are available to you and how much mortgage you will be able to borrow

A “bad” or low credit score will make lenders less keen to lend to you. You may need a bigger deposit, be charged a higher interest rate, or be refused a loan altogether.

What Credit Check Do Mortgage Lenders Use?

A credit check is one of the checks a lender will do before offering you a mortgage. A lender will also find out more about your financial situation in a mortgage interview

Before applying for a mortgage, some people apply for a mortgage agreement in principle. This will give you an idea of how much you could potentially borrow and is based on a credit check. 

Lenders will carry out either:

  • A soft credit check 
  • A hard credit check. 

A soft credit check - This is a preliminary credit check. The lender will see some information about you – but not all of it. This type of credit check can’t be seen by other lenders, won’t leave a “footprint” on your credit report, and won’t impact future applications.

A hard credit check -  This is when a lender sees a full overview of your credit report. This type of credit check can be seen by other lenders, will leave a “footprint” on your credit report, and will impact future applications. Too many hard checks can make you appear desperate to borrow money – this is not attractive to lenders.

Before you apply for a mortgage agreement in principle, ask your lender whether it will be carrying out a soft or hard credit check. Lenders will likely do a credit check when porting your current mortgage too, so it's important to be prepared.  

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What If My Mortgage Credit Check is Poor?

If a credit check shows a poor credit score, you’re likely to be rejected for a mainstream mortgage. 

Common reasons for a bad credit score include failing to pay at least the minimum on your credit cards each month, not making debt repayments on time, failing to pay household bills on time, and using too much of your available credit (known as credit utilisation). 

A poor credit score might not mean you can’t get a mortgage at all. Some mortgage lenders specialise in offering mortgages to people with bad credit. However, any mortgage offer is likely to mean:

  • You need a bigger deposit
  • You’ll be charged a higher interest rate

A mortgage broker will be able to advise you on the best lenders to apply to for your individual credit history.

How You Can Improve Your Credit Score for a Mortgage Application?

There are a number of steps you can take to improve your credit score.

These include:

  • Paying bills on time. Setting up direct debits will ensure you don’t miss payments on utility, broadband and mobile bills.
  • Being on the electoral roll at your current address.
  • Avoiding payday loans and other high-cost short-term credit.
  • Having a credit card and using it responsibly. This means regularly spending on the card and paying the bill in full each month.
  • Closing any unused credit cards or credit accounts. 
  • Keeping your credit utilisation low - below 30% if possible. Your credit utilisation is the percentage of your available credit you actually use. For example, if your limit is £1,000, 30% would be £300. 
  • Make sure all your details are correct on your credit file. 
  • Being careful about “financial associations”. You create a financial association if you take out credit jointly with someone else. If the other person has a poor credit score, it will affect your credit score.

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Save on Your Property Purchase and Home Move with Compare My Move

When it comes to organising your house purchase and move, we’re here to help. From comparing conveyancers and hiring a chartered surveyor, to helping you find a moving company, Compare My Move can save you up to 70% on the costs. Using our forms to compare professionals will also save you time so that you can focus on your new home.

Adele MacGregor

Having written for PerformanceIN, WalesOnline, Grazia Magazine and The Olive Press, Adele now writes advice articles for home movers, first-time buyers and house sellers alike.

Emma Lunn

Reviewed by Emma Lunn

Freelance Personal Finance Journalist,

Emma Lunn is an award-winning journalist who specialises in personal finance, consumer issues and property.