Many or all of the products and brands we promote and feature including our ‘Partner Spotlights’ are from our partners who compensate us. However, this does not influence our editorial opinion found in articles, reviews and our ‘Best’ tables. Our opinion is our own. Read more on our methodology here.
There isn’t a set credit score you need for a mortgage if you’re buying a property or remortgaging. However, a better score can make it easier to get a mortgage and help unlock more options for borrowing at cheaper interest rates.
🤓 Nerdy Tip
Some experts recommend that you look at your credit score and report at least 12 months before applying for a mortgage. If your credit score isn’t where you’d like it to be, this should give you plenty of time to improve it and bag a better mortgage deal.
What credit score is needed to buy a house?
While a good credit score may mean you have more – and better – mortgage options, you don’t need a set credit score to buy a house.
While your credit score shows how a mortgage lender may view your application, each lender has its own system for deciding on your application. It will usually make a decision using the data in your credit file and the information you provide, such as your income, debts and regular spending.
It all means that a good credit score doesn’t mean your application will be accepted, while a bad credit score doesn’t mean your application will be refused. However, your credit score is still useful because it’s based on the data in your full credit report and shows you how the lender may assess your credit history.
Check each score before applying for a mortgage
There are three UK credit reference agencies – Equifax, Experian and TransUnion – and each one works out your score differently.
They may also base your score on slightly different data about your credit history, because not all firms report to each credit reference agency. You might have a current account from a bank that reports data to all three, but a credit card from a provider that reports data just to Experian, for example.
This means that you have three different credit scores and it’s worth looking at each one before you apply for a mortgage. This is because it’s not always obvious which credit reference agency a mortgage provider uses to check your credit history. Here’s how to check your credit score for free:
- You can sign up for a free 30-day trial with Equifax to check your score with them, or use ClearScore, which is a free service that gives you a score based on Equifax data.
- Experian’s basic free account gives you a credit score that’s updated monthly.
- TotallyMoney and Credit Karma are free services that give you a score based on TransUnion data.
Your credit score is a three- or four-digit number that represents the health of your credit history. Alongside checking your score, requesting a free credit report is an important step to take before buying a house because it will give you the detailed information that a lender sees when it runs a credit check on you.
Good credit scores for a mortgage
There’s no set credit score that you need for a mortgage. However, If you want to apply for a mortgage, a better score means you may have more options for borrowing money at better mortgage rates than if you had a lower credit rating.
Credit reference agencies have credit rating systems that can tell you whether your score is good or needs work.
But a good credit score doesn’t guarantee that you’ll be accepted for a mortgage. It’s also important to get to grips with the lender’s eligibility criteria – you could use an eligibility checker and get a mortgage in principle to feel more confident about applying.
| Equifax | Experian | TransUnion | |
|---|---|---|---|
| Good* | 671-810 | 881-960 | 604-627 |
| Excellent | 811-1000 | 961-999 | 628-710 |
*Referred to as Very Good by Equifax
Mortgage lenders also check your affordability
Your credit history is only part of the picture. It tells the lender how you’ve managed borrowing in the past, but doesn’t indicate whether you can afford the mortgage repayments in the future.
To work this out, the lender asks for information about your regular income and outgoings. It will assess whether you’ll still be able to afford the repayments if the situation changes, for example, if interest rates rise or your income falls.
Because the lender doesn’t just look at your credit history when deciding on an application, you could still be accepted for a mortgage even if you don’t have the best credit score.
Can you get a mortgage with bad credit?
It’s possible to get a mortgage if you have a bad credit score. There are specialist mortgage providers who are willing to consider applications from people with a bad credit history.
But it will usually be more costly to borrow money, because mortgage providers make up for the risk of lending to people with a poorer credit history by charging higher interest rates and fees.
What’s more, the mortgage provider may not be willing to lend large amounts and could ask that you have a bigger deposit.
You may not be able to go to the specialist mortgage provider directly – you’ll often need to apply through a mortgage broker instead.
Because of these disadvantages, it’s usually worth improving your credit score before applying for a mortgage. But this takes time, so you should give yourself at least six months to build a better credit history.
Some experts even recommend that you check your credit score and report at least 12 months before you plan to apply for a mortgage, giving you the time to fix any problems.
You might realise that you have a ‘thin’ credit file for example, which means there isn’t much data about how you’ve borrowed money in the past. A year gives you the time to establish a record of making regular payments – not something you can do a month before you apply.
If you have a County Court Judgment (CCJ) against you, have been made bankrupt or entered into an Individual Voluntary Arrangement (IVA), these stay on your credit report for at least six years. It takes more time for the effects of these arrangements to be reduced, but specialist mortgage providers may still be willing to consider your application.
Image source: Getty Images
About the Author
Dive even deeper
Debt Consolidation Loans: Compare Rates to Combine Debt
by Rhiannon Philps
17 Tips on How to Get Cheap Car Insurance
by Tim Leonard
by Amy Knight