Credit Scores and Credit Searches
Understanding your credit score to get the
right mortgage for you
Get in touch for a free, no-obligation chat with an adviser to see how we might be able to help.
Helping you buy the house or holiday
home you really want.
What is a Credit Score, Credit Search or Credit Reference?
A credit score is a numerical value attached to you by a credit agency to determine your creditworthiness for lenders and providers looking to loan you money.
There are currently 4 main credit reference agencies who gather and hold your all your financial transaction information.
Companies looking to offer you credit can access this information and use it make a judgement about suitability to lend to you.
The agencies are Equifax, Experian, Transunion and Crediva.
I have a score of 999 from one agency and my friend only has 585. Why the difference?
You have the highest score; this shows you have credit or loans and conduct them well.
Your friend may be having loan payment issues, may have little or no credit, may not be traceable, or a combination of these.
He or She will probably have more difficulties getting a mortgage and they would be advised to order a full report so they can show an adviser what has happened.
Do Credit Reference Agencies determine whether I get a loan?
No, they do not.
They supply the information to the lenders who will then use their own criteria to decide whether they wish to help or not.
Can a Credit Reference Agency Blacklist me?
No, the answer remains the same as above. They are just data providers.
If information is wrong about me on a credit report, can I get it changed?
Yes, you must as soon as possible.
The agency will show you how to do this on its T&Cs.
Will information be about me forever?
No, data stays on your profile for 6 years.
Do all mortgage lenders use credit scoring as a method of judging loan suitability?
The bigger lenders tend to credit score, whereas some smaller lenders credit search and look to interpret the score rather than just accepting it.
This means they check what credit you have but make a human judgement as to whether to lend or not.
Do I need some form of credit before I get a mortgage approved?
The best answer is yes, it is advisable to.
Let’s say for example you had a default from a mobile phone provider, and had no other form of credit, your score will be lower than if you had satisfied the default and had a well conducted credit card.
We recommend first time buyers to have a credit card, use it sparingly and repay the balance in full each month.
How does a mortgage lender or credit agency know where I live?
You need to ensure that your bank has an updated address straight away when you move.
You should always sign onto the electoral roll when you move to a new address.
Lenders hate not being able to locate prospective borrowers.
My credit score is excellent therefore I will get the mortgage I want.
To have a top score is a great start but your requirements and amount of borrowing required must match the lenders criteria and affordability calculations.
Quite simply; keep addresses up to date, sign on to the electoral role, have as smaller number of paid-in-full credit cards and loans as you can.
Don’t miss or make late payments.
I share a house with someone who is awful with money. Will this go against me?
Only if they “share” or are associated with some credit you have.
My credit score is poor. Does this mean I won’t be able to get a mortgage?
No, not necessarily.
Some lenders specialize in helping people who have had or have financial difficulties.
The rates will be higher than mainstream mortgages and you will typically need help from an adviser to see if an application can be passed.
Always have a copy of your latest full report for the adviser.
I did not realise I had a CCJ served against me for non-payment of a parking fine. What can I do?
Some mainstream lenders will help borrowers if they have small debt problems against their name.
It is important to download your credit file and talk to a registered mortgage adviser about the problem. Help may be possible.
I have been told to not keep checking my credit score as that will harm it, is that true?
No, this is not correct.
It is a good idea to regularly check your credit score, particularly in this age of account hacking and other internet scams.
What is a soft footprint and what is a hard footprint credit search?
Many lenders used to leave a trail that they had searched your file.
The more this was done the more likely your score would diminish as lenders were suspicious why search after search was occurring.
Many mortgage lenders now operate a system where their search is invisible which is much fairer for the customer.
Can you help me access my credit file?
Yes, we can point you in the right direction.
Different lenders use different credit agencies, so we’ve teamed up with Checkmyfile who will provide a report that covers these different credit agencies.
You can sign up to get your credit report document from them here: Get My Credit Report.
Please be aware, they offer a 30-day free trial* and then the service comes at a monthly cost. So, if you don’t want to use the ongoing service, please be sure to cancel your account with them once you’ve downloaded the credit report for us otherwise you will be charged by them on an ongoing basis.
For full disclosure, we’ll also receive £12 when you do so as a thank you from Checkmyfile for recommending their service.
*Accurate as of publication date 27th April 2020.