If you’re on the hunt for a mortgage, you’re likely to hear a lot about your credit score. If this concept is unfamiliar to you, though, you may be feeling a bit lost.
What is it? How do you get one? How do you make it better so you can get the best rate possible on your mortgage?
We’ve got you covered. In this guide, we’ll define the terms you need to know and guide you through the steps you can take to make sure your credit score looks great when your mortgage broker or lender checks it. That way, you’ll be sure to get a great home loan!
Table of Contents
What Is My Credit Score?
If you’re not very familiar with credit scores, you may be wondering, “What is a credit score?” You’re not alone.
In the UK, a credit score is a three-digit number that lenders use to evaluate your reliability when it comes to repaying debts. Credit ratings range from very poor to excellent. The higher the score, the more trustworthy lenders view you.
Generally, lenders keep a record of your credit history for six years. Each company uses a three-digit scale. Experian’s ranges from 0 to 999, Equifax goes from 0 to 700, and TransUnion goes from 0 to 710.
How Do Lenders Check Credit Scores?
Three credit reporting agencies provide UK lenders with credit reports. These are Experian, Equifax, and TransUnion. They offer credit history checks to landlords and employers, too.
The main purpose of these is to assess how well you repay loans. Other parties may use them to verify your identity.
The way lenders handle credit scores for UK borrowers varies. Some may check with just one agency, while others may look at more than one to get a better picture of your overall score.
But it’s not just the score that they’re interested in – they also have algorithms they use to decide whether or not you’re a good risk.
When you apply for a mortgage, you’ll need to fill out an application form to get a UK credit report.
You’ll need to provide your name, any previous names you’ve had, your addresses over the past three years, date of birth, contact details, employment status and income, residential status, and details of any existing credit commitments. This is the information that’s used to create your credit score.
It’s important to make sure all the information you provide is accurate. If a lender finds any discrepancies between your application and official records, your application will be rejected.
When a lender is processing your application, they’ll do either a hard or a soft credit check.
A hard credit check involves searching your credit report and is recorded, so future checks will be able to see you applied for credit. Making multiple applications in a short space of time can make it look like you’re desperate for a loan.
A soft credit check, on the other hand, is a way for a lender to see if your application is likely to be successful without doing a full check. It doesn’t leave a mark on your credit history and is the type of check lenders will usually run if you ask “What is my credit score?” in the UK.
The Difference Between the Good and Bad Credit Ratings UK Lenders Look For
In the realm of credit scores, it is essential to know what qualifies as a good rating and what qualifies as a bad rating.
People commonly search for terms such as “What is a good credit score UK mortgage lenders want?”, as a bad score may make it impossible to get the mortgage they wish for, as lenders may view them as a high risk.
So what is a bad credit score UK lenders look at? Experian considers any score below 721 to be a bad credit score. Moreover, within this range, scores between 0 and 560 are regarded as very poor, while scores between 561 and 720 are seen as merely poor.
With Equifax, any score below 380 is considered to be poor, and scores between 0 and 270 are thought to be very poor. For TransUnion, any score between 0 and 550 is considered to be very poor, and scores between 551 and 565 are seen as poor.
What Is a Good Credit Score in the UK?
It is important to note that credit scores for mortgage products in the UK vary from lender to lender. There is no set minimum score necessary to get a loan, but each lender will review your score before agreeing to lend you money. Therefore, it is important to boost your credit score as much as possible before applying for a loan.
When a UK lender orders a full credit report, you will want your score to be between 881 and 999 on your Experian credit report, between 420 and 700 on your Equifax credit check, and between 604 and 710 on your
TransUnion credit score check. The higher your scores from any of these bureaus, the more likely you are to receive approval for your loan. If your credit score is good, you will have plenty of loan options available to you.
How Do You End Up with a Bad Credit Score in the UK?
There are many reasons why you may have a low credit score. Primarily, if you don’t make payments or you’re late with them, that can have a detrimental effect on your score. Not making payments at all will have an even worse effect.
Additionally, having excessive debt can also damage your score. If you have multiple accounts with high balances, a lender may not be willing to lend you more.
Moreover, having a short credit history can also be a problem, since lenders want to see that you’ve borrowed before and paid back on time. The worst thing a lender can find in your file is a bankruptcy or County Court Judgement (called CCJs). Bankruptcy remains on your record for six years, and a CCJ also stays for the same amount of time.
How Do I Check My Credit Score?
Wondering how to check your credit score? You’re not alone. Knowing how to check your credit score in the UK is essential. While a lender will always look at your credit score when you apply for a loan, you can check your credit score yourself to help avoid any unexpected issues before applying for a mortgage.
Fortunately, it’s quite simple to check your credit score. In most cases, you can even get a free credit score UK lender report! Here’s how: you can apply to each of the credit agencies and request one free report every year.
This is known as a Statutory Credit Report, and they must provide it to you. However, the information is only updated monthly, so keep this in mind as you view your data.
You don’t need to talk to the credit reporting companies only to get your report. You can also get a free online credit report from various services. All you have to do is search “Check my credit score UK”, and you’ll find a company that can do that for you. You might have heard about these when you watched Martin Lewis.
Credit score reports are often accessible from financial experts and other financial websites. For instance, you can get a Martin Lewis credit check for free on his website, but you may also be asked to sign up for something else.
While most sites like that offer a free introductory online credit report, most of them will encourage you to buy additional services, like security monitoring and other kinds of assistance. Generally, you’ll need to create an account with these services to view your report.
Some paid subscription services provide online credit reports. A few of them can offer more regular updates so that you can continuously track your score.
While most offer a free trial period, you’ll probably need to pay after 30 days of service.
You can even find a credit score calculator to help answer the question “How do I find my credit score?” These calculators can generate a quick credit rate check to help you understand how your current behaviour may affect your credit score.
How Do You Improve Your Credit Score?
If you think your credit score isn’t as good as it should be, you may want to learn how to improve it. Fortunately, it’s not difficult to raise a credit score UK lender review.
There are several ways to do it. First, if you haven’t already, register to vote. Without being on the electoral roll, it’s nearly impossible to get a mortgage. You can register online or by post.
Don’t worry, you don’t need to vote if you don’t want to. You can also protect your privacy by removing your name from the open register, so third parties can’t buy your personal information and market to you.
Another tip is to check for any errors on your credit report. A Which? survey found that 19% of people had errors on their credit report. These might be simple things like incorrect addresses or misspellings, but you need the information on your application to match the report or you won’t get the loan.
You also need to check for fraudulent activity when you run a free credit check in the UK. If you see something that you know wasn’t you, contact the credit agency.
It’s possible someone has stolen your identity and is building up debt that you’ll be liable for. The agency should correct the file and put a note in it so your credit score isn’t impacted.
Making timely payments is also important if you want to improve your credit score. A single late payment can drop your score by up to 80 points. It doesn’t matter if it’s on a personal loan, credit card, or mortgage loan. Just consistently paying on time can make a huge difference.
If you’ve had joint credit with someone in the past six years, your credit files are linked. This is known as a financial association, and if the other person has credit issues, you may have problems too. End the association by closing the joint credit account, then have the agency add a note to your file that you’ve disassociated yourself.
Lastly, avoid applying for a lot of credit when you’re preparing to apply for a mortgage. Every time you apply for a loan or credit card, it leaves a hard credit check in your file. Potential lenders will see those checks and think you need a lot of credit.
To boost your credit score, you should also look to remove defaults, CCJs, and bankruptcies from your file. If it happened more than six years ago, it shouldn’t be there, but that isn’t always the case.
Check with the credit agency to make sure they remove CCJ from a credit report. For defaults, if you pay off what you owe within 30 days, the CCJ won’t be added. You can also reduce the impact by telling the agency why you missed payments, like if you were unemployed or ill.
How Do You Build Your Credit Score When You’re Just Getting Started?
If your credit score is low due to a lack of a credit history, there are numerous ways to learn how to boost a credit score UK lenders consider.
There are a few steps you can take to build it. If you’re wondering how to get your credit score up, remember that even something as simple as a mobile phone contract can help you build your credit.
Additionally, paying your utility bills on time can also be beneficial in building your credit score.
Getting an interest-free credit card may also be useful as you work to learn how to improve your credit score. However, it is essential to pay it off in full each month. You should also keep your credit utilisation low, preferably below 50%.
Work to Improve Your Credit Score Before You Apply!
If you’re planning to apply for a home loan soon, you must understand both how to obtain a credit score and how it affects your mortgage. Work on improving your credit score, then use a free service from a UK site to check your credit score.
This will give you a clear picture of the numbers you’re facing before you even start shopping for a home. Once you’ve done that, you’ll be set to apply for a great home loan.
FAQs
Not sure you have all of your UK credit score questions answered? Here are a few of the most commonly asked questions about credit scores in the UK.
Where Can I Learn More About How to Improve My Credit Score?
If you’re wondering to yourself, “How can I improve my credit score?”, you may be curious about where you can find more information.
There are many resources available, such as government websites and lenders, that supply a wealth of advice on increasing your credit score. When researching this topic, you’ll likely come across plenty of tips to help you get your score moving in the right direction.
To build up your credit score, be sure to read up thoroughly and put the advice you find online into practice. Improving your credit score can take some time, but if you persevere you’ll eventually experience success. Also, don’t forget to check your credit score regularly on free websites to observe your progress.
How Do I Improve My Credit Score If My Ex Ruined It?
Are you looking for answers to questions like “How do I improve my credit score after divorce or separation?” Well, you’re not alone. Thousands of people are searching for terms like “How to get a better credit score” in your situation. Try using search engine terms like “check my credit rating” to find out what your score is right now.
Once you know that, take a look at the accounts the two of you still have open together. Close those accounts as soon as you can. Then, get in touch with the lender to make sure they know that you’ve disassociated yourself from that person.
This will help protect you from any future issues they may have. However, it may take some time to see a change in your credit score as any mistakes your ex made will stay on there for at least six years.
How Long does it Take to Improve a Credit Score UK Lenders Consider?
Looking for help understanding how to build your credit score? Begin by ordering a free credit report from a UK website.
If you search for something like “my credit rating” or “check my credit”, you’ll be able to find the information you’re looking for. Running a credit check on yourself from the UK won’t have any impact on your credit score, so don’t worry.
It is considered a soft pull and you’ll be able to get a free credit score report. If you don’t like the results, head to government or lender websites and look for “how to build my credit score”. The negative entries can stay on your credit report for up to six years, but small improvements can be made over time.
Using a free credit check website regularly will show you how the report is changing, so you’ll know when it’s the right time to apply for a loan.
How Do I Find Out My Credit Score in Another Country?
Your credit score is a global phenomenon. Credit checkers can vary from country to country, but the three major bureaus in the UK also have a presence abroad.
This means that the credit score checks UK lenders run may be the same as the scores you get in other countries.
To find out how to get a good credit score in other countries, or even how to get a credit score in general, the best thing to do is to contact a lender in that country.
What is the Minimum Credit Score to Qualify?
The question is a bit unclear. For mobile phone contracts in the UK, the required credit score is usually quite low. In contrast, for larger loans such as mortgages, the credit score required is higher.
There is no concrete minimum credit score for mortgages in the UK, but lenders use credit reports to determine the level of risk they are taking on, regardless of the loan type. Generally speaking, most lenders prefer customers who have a “good” credit rating.
Any thoughts about selling your home?
Are you looking to sell your house? We buy houses in any condition. Get in touch if you are thinking of selling.
Property Saviour Price Promise
- The price we’ll offer is the price that you will receive with no hidden deductions.
- Be careful with ‘cash buyers’ who require a valuation needed for a mortgage or bridging loan.
- These valuations or surveys result in delays and price reductions later on.
- We are cash buyers. There are no surveys.
- We always provide proof of funds with every formal offer issued.
We'll Pay £1,500 Towards Your Legal Fees
- No long exclusivity agreement to sign because we are the buyers.
- You are welcome to use your own solicitor.
- If you don’t have one, we can ask our solicitors for recommendations.
- We share our solicitor’s details and issue a Memorandum of Sale.
Sell With Certainty & Speed
- Our approach is transparent and ethical, which is why sellers trust us.
- 100% Discretion guaranteed.
- If you have another buyer, you can put us in a contracts race to see who completes first.
- Complete in 10 days or at a timescale that works for you. You are in control.
