How To Check Minimum Credit Score For Mortgage

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Shopping for a home? Thousands of people in the UK do each year, but if this is your first time or it’s been a while since you purchased a home, you may feel a bit lost. After all, there’s so much to consider. You likely have lots of questions, too.

Can you get a mortgage with bad credit?

How will a mortgage with bad credit UK buyers use affect your credit score?

Who are the best lenders for mortgage products aimed at people with bad credit?

How much does a loan affect your credit score in the UK?

What credit score do you need for a mortgage?

UK buyers just like you have all the same questions and for good reason. The process of actually getting a mortgage is one of the toughest parts of initially buying a home, and there’s quite a bit of mysticism around actually getting that mortgage and qualifying for it, especially if you’ve had a few credit problems in the past. this guide can help you sort them out.

What Credit Score Do You Need for a Mortgage?

Exactly what credit score is needed to buy a house? It’s sometimes a mystery because different banks require you to do different things to obtain a mortgage, and sometimes that involves increasing your credit score. Generally, the minimum credit score for mortgage UK products aimed at average buyers is in the good to excellent category. It’s tough to say, though, exactly what credit score for mortgage products you’ll have to have. That’s because every lender uses a slightly different algorithm to rate buyers. If you were to compare Halifax’s lending criteria to a very different bank like Barclay’s lending criteria, you’d find their practices were quite different. The reality is, though, you can’t compare those two because banks tend to be fairly secretive about their practices. You can still have an excellent credit score but be refused a mortgage in the UK. The credit score needed for a mortgage varies by lender, but in most cases, if you have a credit score that ranges from good to excellent, you’re likely to get the help you need to buy a home. While there’s no set credit score, understand that if you’re going with most mainstream lenders, your credit will have to be fairly good to get a mortgage.

How Is Your Credit Score Calculated?

If you’re asking yourself “What credit score do I need for a mortgage,” you may know how important a credit score is. If you don’t, though, it’s key to understand how a mortgage and a credit score go hand in hand. A credit score is a three-digit number that helps tell a lender how reliable you are when it comes to paying off your debts. Generally, it takes into account how much debt you’ve had in the past as well as how regularly you pay those debts. Typically it lists each balance you have including other kinds of loans and credit cards. It also lists any problems you’ve had with those loans including late payments, defaults, or CCJs.  You’ll want to pull your credit report to learn more about your credit score before you go talk to a lender. There are a couple of ways to do that. You can just pull it from one of the major companies. It’s fairly easy to request. You can also use a service like the CheckMyFile app. To sign up, you’ll likely need to leave CheckMyFile a contact number and some other information, but this app and those like it can be quite helpful. If, as you’re checking your credit score for a mortgage in the UK, you discover problems with your report, there are a few things you can do. You can simply contact Equifax online help or online help from the other credit bureaus to have the mistake fixed. You can also usually file a complaint by making a phone call or two. It’s key that you have any potential problems with your credit file repaired, though, because if your credit score for a mortgage in the UK is fairly low. You may have trouble getting what you need to buy a home. Once you pull your credit score, it’s important to understand that there are three key categories lenders are looking for. The credit score to get a mortgage typically has to fall into something like fair, good, very good, and exceptional. Naturally, a credit score of “fair” means a mortgage may be tougher to get than if you had a credit score of exceptional. The tricky part, though, is interpreting the scores themselves because all three major credit bureaus have completely different scoring systems. If your lender uses Experian, for instance, a good score ranges from 881 – 960. With Equifax, though, good ranges from 420 – 465. If your lender uses TransUnion, though, the good category scores range from 604 – 627.

What is a Good Credit Score for a Mortgage UK Lenders Will Make?

Wondering about the answer to the question “What is a good credit score to buy a house?” You’re not alone, but those numbers vary quite a bit. Most lenders want you in the good to the excellent category of whatever credit bureau they use. Keep in mind that many lenders use more than one credit bureau to check your score. If you have an excellent rating on any of those scales, you’re very likely to get a good mortgage at a great interest rate. If your credit is simply designated as good, though, you’re still likely to get a mortgage, it just may not have the interest rate and repayment terms you most want. If your credit is fair, you may or may not be able to qualify for the mortgage you want.

Keep in mind that many different things influence your credit scores. Likely the most influential piece of your credit score is just paying your bills on time. Every time you pay a bill late, it hits your credit score fairly hard, so if you want a great credit score, make certain you’re paying on time as much as you can. In addition to paying your bills on time, you’ll also want to make sure that you have a fairly good mix of credit. You want to avoid maxing out your credit cards if at all possible. Additionally, keeping the number of credit inquiries on your record to an absolute minimum is a must, as it can help ensure lenders understand you’re not looking for a loan at every turn, you’re just looking for a great mortgage to help you get in the home of your dreams.

It’s really important to note that if you’re a fairly new credit user, you likely won’t have a very good credit score yet. Don’t worry, though. You haven’t done something wrong to injure your credit. Lenders are just looking for a fairly long track record of using credit responsibly over time. As long as you continue to pay your bills and don’t fully use any line of credit you have, you’ll build a solid credit score over time.

It’s also essential to remember that mortgage lenders tend not to base their lending decisions just on credit scores. Instead, they’ll also look at your current income as well as exactly how much you’re looking to borrow. They may also look at your income history to learn more about the resources you’ll have to pay back what you borrow.

Can You Get a Mortgage with Bad Credit?

Many people ask themselves “Can I get a mortgage with bad credit,” and for good reason. Your credit score is one of the key ways lenders evaluate whether you should even have a mortgage, so if you have a fairly bad credit score, you may have trouble finding a lender that will work with you. The real key is learning how to get a mortgage with bad credit because there is a way to do it. There are many bad credit mortgage lenders available out there, and connecting with the right team is essential if you’re searching for the right mortgage. Getting a mortgage with bad credit takes some time and effort that you may not have had to put in if you had a stronger credit score, but that doesn’t make it impossible. You’ll simply need to talk to a broker or a few different lenders about mortgages for bad credit. UK lenders often take so much more into account than bad credit. Often, however, these loans won’t come with the great rates you see advertised. Mortgages designed for bad credit buyers will typically come with fairly high-interest rates, and they may require a much larger deposit than other kinds of mortgages.

Keep in mind that if you’re in the market to re-mortgage your house, that’s possible with bad credit too. As with the original mortgage, though, you’ll need to shop around for a bad credit re-mortgage product that fits your needs. Bad credit mortgage lenders in UK banks continually work to provide several products for people like you. As with the original mortgage, though, you can expect fairly high-interest rates with a product like this one.

You may even be able to get a mortgage for a bad credit first-time buyer loan that integrates some of the perks first-time home buyers sometimes experience. First-time home buyers sometimes get lower deposits or other perks that are incredibly attractive, and that’s not lost just because you have a lower credit score than you’d like. While there aren’t many, there are a few companies that offer a mortgage for bad credit first-time buyer products. You’ll simply need to look a bit harder for the right lender to meet your needs.

The best option if you’re struggling to find a lender at your credit score is to work with bad credit mortgage brokers. These lenders focus on people with low credit scores. Mortgage lenders sometimes make products available to them that they don’t make available to the general public, so when you work with one of them, you can be certain you’ll get the help you need. With the help of a broker who specialises in mortgages for bad credit products UK buyers use regularly, you’ll easily be able to find a mortgage for poor credit scores. If you’re worried about talking to someone just because you know you have bad credit, don’t. Mortgage lenders for bad credit abound these days, and it is truly possible to be buying a house with bad credit. Stop worrying. You can get a mortgage with bad credit. These low credit score mortgage products may initially be more expensive, but they do exist. Stilling asking yourself “Can I get a mortgage with bad credit?” UK lenders will help you sort that out, but only if you go talk to a broker or a lender. It does you little good to simply type the terms into a search engine. Instead, reach out by phone or email to learn more about what’s available for you.

If Only One Person Has Bad Credit . . .

If you’re looking for a joint mortgage, but just one person on the loan has bad credit, it is possible to still get the loan you want. You may be tempted to have just the individual who has good credit apply for the loan, but that’s not possible. For most lenders, that’s a pretty serious problem. If you’re married or in a civil partnership, you don’t have any choice but to apply for a joint mortgage. The lender will look at both credit scores, and then make a decision based on that file. Often it’s easier for two people to obtain a mortgage, even if one has bad credit, as the lender understands that at least one person has the resources to repay the loan.

Can You Get a Mortgage with a Default on Your Record?

If you have a default on your credit report, you likely understand that it is already having a fairly serious impact on your credit score. As with other credit score problems, though, you can still obtain a mortgage even if you have a default on your credit record. Defaults remain on your credit record for six years. A lender will still consider you for a mortgage if the default happened quite a few years ago and has since been resolved. If, however, it’s fairly recent, the lender may ask you about it, and you’ll be expected to provide some reasoning behind what happened and what you’ve done to repair the potential problems since that happened. They may still choose to make the loan if you have a fairly good explanation for what happened.

Are There Mortgage Lenders that Don’t Credit Score?

Unfortunately, there aren’t any mortgage lenders that don’t have a credit score. Almost every lender uses credit score as some measure of whether or not you’re a safe loan prospect. Your credit score is such an important understanding of how you’ve used credit in the past, so most lenders do tend to use it, even though some rely more heavily on it than others in their algorithm of what is important in choosing the right person to loan to.

Getting a Mortgage in Principle

If you’re worried you don’t have the credit score for a mortgage, one thing you can do is chat with a lender to learn more about where you’re at. Many will offer a mortgage in principle or an agreement in principle. NatWest, for example, advertises that they can offer you one in a matter of minutes. You can also get Barclay’s mortgage in principle or even an HSBC decision in principle to help you shop for a home. You can get this documentation from most lenders. You’ll want to take this step because it can help show a potential seller that you do have the right credit score that mortgage companies will make loans to.

It’s important to understand exactly what a mortgage in principle is, though. This documentation is a soft credit check that allows a lender to understand a few basics. It helps you understand how much you might be able to borrow on a home loan shortly. You can use it with an estate agent or a seller to demonstrate your financial readiness when you make a bid on a home. It is not, however, a guarantee that the bank will lend to you. It’s just some idea of how you might fare when you go to get the mortgage itself.

Before you approach the bank for a mortgage in principle, though, make sure this loan is something you can afford. Most lenders have calculators built into their sites to help you better understand whether it’s a product you can afford. For example, if you visit the Barclaycard Minimum Payment Calculator online, you can calculate exactly what you’d have to pay for mortgages of varying amounts. The minimum mortgage amount in the UK is usually something like £50,000, but that varies from lender to lender too. If you have a small mortgage you’d like to take out (or even a large one), you’ll certainly want to be sure it’s a financial commitment that you’re already ready to take on. If it’s not, you’ll need to perhaps step back from the home-buying process until you’re sure you’re ready.

Finding the Right Lender

The other key to getting a mortgage is to find the right lender to meet your needs. The simple truth is, though, that’s changing all the time. A lender that was named the Best Bank for a Mortgage in the UK in 2021 isn’t likely to hold that title for long, so you’ll want to do your research carefully. If you’re searching for a broker, you’ll want to do a few things. Start by looking for someone who looks at the entire market, not just a few different lenders. These are typically called whole market brokers, and they’ll give you access to loans from several different lenders. You’ll also want to select a broker who offers direct-only mortgages, as these are deals only mortgage brokers can get. Finally, you’ll want someone with the experience you need, particularly if you’re looking for a loan with bad credit.

If you’re just looking at individual lenders, it may be useful to do a bit of online searching to see which lenders have the loan products and rates that best fit your needs. Remember that every time a lender does a hard pull on your credit score, it does temporarily reduce your credit score, so you’ll want to limit the number of lenders to which you apply. That’s one reason that working with a broker is such an attractive proposition. You have the chance to look at many different loans with a single application, and it won’t damage your credit score in the process.

If Bad Credit Prevents You From Getting a Mortgage

If you do have bad credit and it prevents you from getting a mortgage, your best next step is to work on repairing your credit. You may have to rent for a bit longer, but taking simple steps like paying all of your bills on time and reducing the amount you already have borrowed on things like credit cards will help you improve your overall credit score. You’ll also want to make certain that your name is currently on the electoral rolls and that you don’t have any mistakes on your credit report, as those can seriously impact your overall score. That can make it seem like you’re ready for a bit of commitment like a mortgage in the eyes of a lender.

The Bottom Line

If you’re still left asking yourself “How do I get a mortgage,” just remember that your best first bet is to chat with a mortgage broker or lender to get the help you need before you start shopping for a home. Having a mortgage in principle certificate in your hand can go a long way toward ensuring your bid will help you get the home you want. Even if you’ve had bad credit in the past or you’re not quite sure how your credit score looks now, the best thing you can do is to talk to a lender as soon as possible, as you won’t know what steps you need to take to obtain that mortgage until you speak with a professional in the field.

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