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If you’re thinking of buying a house like a proper grown up then there are things you’ll need to do to prove to ‘the man’ that you are a sensible adult. This will begin with your credit score. A credit score is what lenders (banks etc.) use to determine whether you qualify for a loan. So, basically, if you are looking to get a mortgage and move house, you need a good credit score. It’s a bit of a pain in the backside because it means that if you want to get a mortgage anytime soon then you need to be good with your pennies… You can’t constantly live in your overdraft or blow £300 at the bar on a lavish night out! The lenders want to see you being smart and sensible with your dough.
What’s considered a ‘good credit score’ varies between lenders as not all mortgage providers use the same credit reference agency. A credit reference agency is a company that keeps your credit score, such as Experian, Equifax, or Call Credit. Generally, you need to have a high enough income to cover the repayments of whatever it is you are taking out a loan for…. Presumably (because you are on Compare My Move), this is for your mortgage.
Lenders give varying scores and have their own criteria for what makes a good credit score; some lenders can be pickier than others. However, generally, a good credit score is between 650 and 750. Yep, actual numbers... Not just good or bad... Suddenly it feels like a test! Don’t worry though… we have all you need right here to help you pass the test with flying colours.
If you want to buy a house, your lenders will consider criteria such as:
You can take a peep at your credit score files from any credit reference agency. To see a basic version of your score, you can use services from Experian, Equifax, Callcredit or for free with Noddle.
If you want to really delve into the abyss then you can request a statutory report from Experian, Equifax, or Callcredit for a more in-depth overview of your score. You’ll just need to pay a measly £2 for the privilege. This report will allow you to see exactly how credit agencies have calculated your score. This is like having insider info and it’s useful as you may find mistakes on your file which could have a negative impact on your score. Can’t have that.
You might be worried about your credit score or even quaking in your boots, so it’s a good idea to be aware of what could impact it. You’ll want to avoid things that have a negative effect on your credit rating in the first place... We’ll let you in on a few secrets... Here’s what could lower your score:
You might be worried about a below average credit score, but there are options to improve your credit rating quickly. Our quick fixes are:
If you have a really rubbish credit score then you can’t fix it overnight. It will take months before you see a difference in your credit rating. Here are the best ways to improve your credit score for the long-term. Hang in there...
If you are looking to buy a house but you don’t have great credit, there are some mortgage packages out there for those with a poor credit rating. They will come with higher interest rates and charges as people with poor credit are considered a higher risk. So, there’s a bit of a toss-up for you there. If you plan on buying a home, check your credit score with a credit agency and talk to a mortgage advisor to see what might be available to you. If your options are limited, it might be an idea to plan for a mortgage in the future and work on improving your credit score in the meantime.
We hope this has given you some insight on ‘what is a good credit score’. There’s really no rush! People stress about getting a mortgage but you can only do what you can do, no use obsessing and being miserable. Live your life, be sensible and things will work out.
Last updated on Monday 13th November 2017