Your Credit Score and Mortgage Advice
Knowing your credit score is one of the best ways to show potential mortgage lenders that you know how to manage your finances. The average credit score in the UK in 2021 was 797 (Experian), up by five points from 2020 and a massive 21 points from 2019. No doubt, this has been helped by the emergency support introduced during the pandemic. To see your current credit score, just visit one of the many online sites like Experian or ClearScore and sign up for free.
What’s the Ideal Credit Score To Help Get a Mortgage?
Although there isn’t a minimum credit score for being accepted or declined for a mortgage, a low credit score could mean you are more likely to pay higher interest levels or find it harder to secure a mortgage. In addition, a lower credit rating means you could be a higher risk to the lender.
The best mortgage deals and lower interest rates are available to those with a credit rating over 961. The average credit rating in the UK in 2021 is classed as fair, giving access to mortgage deals with reasonable interest rates.
How Can I Improve My Credit Score to Help My Mortgage Application?
Mortgage lenders will be looking to see that you can stay out of debt and keep up with any financial commitments, monthly payments you are committed to already.
Following these four steps will help to achieve a positive outcome for your mortgage application:
- Don’t apply for any credit six months before your mortgage application. You don’t want to look like you rely on credit to live
- Keep any credit balances at or below 25%
- Check your details are on the electoral register, as it will help lenders confirm your identity and your home address
- Check your credit report once a month and regularly check for errors
Will Applying for a Mortgage Affect My Credit Score?
A declined mortgage application will appear on your credit file and could have a negative effect. You must apply for the mortgage that best matches your circumstances, as this will give you the best chance of being accepted. Working with a mortgage broker is a savvy way to do this. A qualified mortgage broker brings a wealth of experience and knowledge of the market and will be able to identify the best lenders and mortgage products that meet your existing circumstances. Working with a mortgage broker saves you time, money and protects your credit rating whilst giving you a greater chance of a positive outcome.
To find out how mortgage brokers work, give one of our CeMAP qualified mortgage brokers a call 0800 1 777 333