Applying for a mortgage can be a daunting task for even the most well-organised people. There’s a lot to bear in mind when you are preparing for what will probably be the biggest financial commitment you will make during your lifetime. One of the first steps you need to take is to check your credit score.
A credit score is a three-digit number that is calculated on your past financial history. It’s used by mortgage companies as part of their assessment of how reliable you will be in repaying money. There is no fixed benchmark for what constitutes a good credit score in the UK, because each credit reference agency (CRA) has its own system.
Having said that, they are not wildly different. There are three main CRAs in the UK; Experian, TransUnion, and Equifax. Here are roughly the ranges that are considered to be ‘good’ by each of these agencies:
Experian – 881 to 960
TransUnion – 604 to 627
Equifax – 420 to 465
Scores that are above these ranges are considered to be excellent, and will help you to be approved for the best mortgage deals. If your credit score falls in the mid-range, it is considered to be ‘fair.’ It may mean that you will struggle to get the very best mortgage deal, but you should still have a good chance of being accepted by a range of lenders.
Fair credit scores fall approximately at the time of writing into these ranges:
Experian – 721 to 880
TransUnion – 566 to 603
Equifax – 380 to 419
If you have a fair credit score, you may still have plenty of options, but you may be charged higher interest rates than a customer with a good or excellent credit score. If your credit score falls below all of these ranges, lenders will consider it to be poor.
People with poor credit scores will typically have fewer options available to them, but it may still be possible to get a mortgage. There are specialist lenders who only deal with customers with bad credit histories.
They have more flexibility in their assessment criteria than mainstream lenders and will look into the reasons for the adverse credit record on a case by case basis.
If you are in this situation, it’s well worth seeking professional advice from a mortgage broker who has experience of dealing with bad credit mortgage applications. They will have established relationships with niche market lenders, and will understand which ones are most likely to accept your application.
This will give you potential access to exclusive deals that would be impossible to source independently. It also lowers your risk of having a rejected mortgage application, which will damage your credit score even further. The broker will also be able to advise you on any steps you can take to improve your chances of being accepted.
If you are looking for a bad credit mortgage broker in the UK, get in touch with us today.
Your home may be repossessed if you do not keep up with your mortgage repayments.
There may be a fee for mortgage advice. The actual amount you pay will depend on your circumstances. The fee is up to 1% but a typical fee is £595.
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Create Finance Limited is an appointed representative of Mortgage Advice Bureau (Derby) Limited which is authorised and regulated by the Financial Conduct Authority.
Create Finance Limited. Registered Office: 35 Friar Gate Studios, Ford Street, Derby, Derbyshire, England, DE1 1EE. Registered in England Number: 09582938.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. There may be a fee for mortgage advice. The actual amount you pay will depend on your circumstances. The fee is up to 1% but a typical fee is £595.
The guidance and/or advice contained within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK. The actual rate available will depend upon your circumstances. Ask for a personalised illustration.
We may receive commission that will vary depending on the lender, product or permissible factors, The nature of any commission model will be confirmed to you before you proceed. Create Finance Ltd are a credit broker, not a lender.