What Is A Credit Score For A Mortgage?

Here’s an explanation of credit scores in the UK when applying for a mortgage – One of the main factors which will determine your ability to obtain a mortgage is, of course, your credit score. Not only is your actual credit score a deciding component of the mortgage application, but the importance of disclosing all your credit commitments at the point of application cannot be over-emphasised. We have a useful Mortgage Calculator which is a simple tool to help you decide on your lending amount.

What Key Things Do I Need For A Credit Score?

Not all mortgage lenders offer loans the same way; they all have slightly different decision-making processes – here’s a few key factors which are used to help them decide whether to approve a mortage or remortgage which include:

• Firstly, all the information you’ve given them on your application form and signed as a legal declaration of the truth
• The information on your on your credit report (credit history)
• Your public record data and any additional rulings – for example CCJs and/or IVAs
• Maybe you already hold a bank account with them, or hold an active or expired previous policy
• Remember to consider their own lending policy which may be different from other lenders. Always read the small print!

Independent Mortgage Advisor West Yorkshire, Bingley, Bradford and Leeds

As an independent mortage broker based in Bingley I can offer free impartial advice for potential property owners of Bradford, Leeds and throughout West Yorkshire. Please contact me if you have any questions or concerns about your credit, I’ll be happy to help: Call Darren FREE on 08000 141948 for no charge impartial advice.

All credit facilities and commitments will be thoroughly checked by the lender. Lenders have access to, and use, multiple credit reference bureaus to check your current and past credit history. If you either fail or forget to disclose these then this may have an adverse effect on your borrowing capacity, or the lender could even decline the application. Read my article on First Time Buyers if this applies to you.

The types of credit commitments which must be disclosed include the following: credit cards, personal loans, hire purchase agreements, car finance, student loans, interest free credit, store cards, catalogues, mobile-phone and tablet device contracts. Things like bikes and sofas on finance also need to be declared. Even credit facilities such as credit cards with a zero balance need to be declared to the lender. Click here to read the Difference Between a Repayment and an Interest Only Mortage.

It’s always a good idea to obtain an up to date copy of your credit file before commencing the mortgage process. This will allow you to identify any current or historical credit issues. As well as credit commitments, lenders will also want to be confident that you are responsible in utilising the credit available to you and you are comfortable maintain the monthly payments. Although adverse credit will have an impact, it’s not the end of the world. Adverse credit includes such things as CCJ’s (County Court Judgements), Defaults, Late or missed payments, IVA’s, and Bankruptcy. Whilst adverse credit doesn’t mean you can’t get a mortgage, it could mean that only specialist lenders may be available to you. As an experienced mortgage broker with many years of dealing with all sorts of client scenarios, I will be able to give you the best advice and secure the most cost effective option for you.

If your credit score is low, there are a number of ways you can improve it. Where you have an unused credit facility, it may be good practice to close the account – for example a credit card that you no longer use. If you have defaults or CCJ’s, repaying any outstanding balance will certainly help to boost your credit score, although lenders will take even repaid CCJ’s and defaults into account for a certain period. Got questions? Contact me today and schedule an appointment at your convenience.