Last reviewed on 18th August 2023 by Martin Alexander (Mortgage Advisor)
It’s important to state that there isn’t a specific credit score for a mortgage. This is because credit scores can vary quite considerably and furthermore, a credit check is only one part of your mortgage assessment.
It’s also possible to have the highest credit score possible and still be declined a mortgage. This is because of other factors that can affect your mortgage chances. Nonetheless, a good credit score is certainly more favourable than a bad credit score.
Higher credit scores can unlock better deals and give you access to more lenders, but there’s no guarantee. Lower credit scores will make mortgage approval difficult, but it’s still very much possible.
A credit score is used by mortgage lenders to assess the likelihood of you repaying your mortgage on time. That being said, the responsibility of repaying a mortgage is ultimately yours.
- What is a credit score?
- Is there a minimum credit score needed for a mortgage?
- What is a good credit score for a mortgage?
- Which credit reference agencies do mortgage lenders use?
- What is the maximum credit score?
- How can I improve my credit score?
- How can I improve my chances of a mortgage?
- I was refused a mortgage because of my credit score
- Should I apply for a mortgage if I have a low credit score?
- Will my credit score be affected if I’m declined?
- Credit score FAQ
What is a credit score?
Your credit score shows how reliable you are with borrowing money. Credit reference agencies will give you a credit score, based on how well you manage repayments. Paying your bills on time will have a positive effect on your score, whereas paying late can damage your score.
Your credit score will vary, depending on the credit reference agency, as each agency uses its own scoring system. Nonetheless, your credit file will still work in a very similar way. The reason for keeping a credit score is that creditors can check your credit files before lending.
Is there a minimum credit score needed for a mortgage?
There isn’t a minimum credit score needed to get a mortgage. This is quite a common assumption but getting a mortgage is possible with any credit score. Of course, a low credit score can make it difficult but a mortgage is still very much possible.
Your credit score is used by lenders as part of their mortgage assessment. If you have a low credit score, but otherwise have a strong application, then your mortgage chances shouldn’t be affected too much.
A good credit score can give lenders the impression that you’re a reliable borrower and are more likely to repay your mortgage on time. That being said, each lender has its own unique scoring system to calculate what a good credit score is. This means that the same credit score may be considered good by one lender, but average or bad for another.
What is a good credit score for a mortgage?
As credit agencies each use different scoring systems, there isn’t a specific score that guarantees you a mortgage. Nonetheless, the higher you score, the better.
For Experian, a score of 881-960 is considered to be good, while 420-465 is considered to be good for Equifax. TransUnion states that 604-627 indicates a good credit score. Credit scores higher than this are rated as excellent.
Which credit reference agencies do mortgage lenders use?
The credit reference agencies that the majority of mortgage lenders use are:
Lenders may just use one or a combination of credit reference agencies to make their assessment. It’s important to check each credit report, as they could vary. This is because credit agencies each use different scoring systems.
What is the maximum credit score?
The maximum credit score for each credit reference agency is:
- Experian: 0–999
- Equifax: 0-700
- TransUnion: 0-710
You can download your credit reports online, to check the scores for each file.
How can I improve my credit score?
You can take certain steps to improve your credit score, such as:
- Ensure you’re on the electoral roll
- Check your credit reports for inaccuracies or fraudulent activity
- Pay your bills on time, preferably on a monthly direct debit
- Check that your address history is correct, especially if you’ve moved recently
- If you have CCJs, make sure they’re satisfied
- Try not to depend on loans and overdrafts
- Don’t apply with multiple mortgage lenders
How can I improve my chances of a mortgage?
Having a great credit score can no doubt help you to get a mortgage. That said, there’s so much more you can do to improve your chances of a mortgage:
- Save as much as you can for a deposit
- Reduce your spending habits at least 3 months before applying
- Clear all of your credit cards as soon as possible
- Settle as much outstanding debt as you can
- Take steps to improve your credit score
- Include all of your income on your application, such as salary, overtime, bonuses, and benefits
- Don’t use payday loans for at least 12 months before applying
We’ll also check your mortgage application before approaching a lender.
I was refused a mortgage because of my credit score
If you’ve been declined because of having bad credit, there may still be hope. Applicants are often declined not solely because of their credit, but mainly because the lender they applied with wasn’t suitable.
Although having bad credit is enough for a lender to decline you, a lender with different criteria may still approve you. Each lender has its own unique assessment so it’s possible to be declined by one lender and accepted by another.
If you’ve been declined, we’ll take a look at your mortgage application in further detail. It’s important to get as much information as possible from your existing lender as to why they declined you.
Should I apply for a mortgage if I have a low credit score?
If you have a low credit score, getting a mortgage won’t be easy. That being said, lenders will look at more than just your credit score. Some applicants may have a credit score of zero, but this doesn’t necessarily mean they’re not mortgage-worthy candidates.
There are some applicants who have never used credit, so although this can give them a very low score, it actually means they’ve taken little or no loans in the past. Explaining this to a lender and showing clear evidence of this may support your application. Having a deposit of at least 15% can also boost your chances of approval.
Learn more: Can I get a mortgage with no credit history?
Will my credit score be affected if I’m declined?
Yes, your credit score can be affected if you’re declined for a mortgage. Don’t risk damaging your credit score by applying with an unsuitable lender. Each time you actively apply for credit, you risk lowering your credit score. Furthermore, being declined can have a severe effect on your credit file. Speak to a mortgage advisor before approaching a lender yourself.
Credit score FAQ
About the author
Martin is a senior mortgage advisor and has held a CeMAP qualification for over 15 years while also completing an MBA in Global Banking & Finance.