Mortgage Approval and your credit score

Mortgage Approval and your credit score

How to ensure that your credit score is good enough to get your mortgage approved



A poor or low credit score is one of the most common reasons for a mortgage being declined. It is also surprising how many times the news that a client has poor credit comes as a huge shock to the person concerned and they genuinely have no idea that there is a problem with their credit.


Quite often, poor credit can be caused by missed utility bills, in particular by unpaid phone bills. This can happen if somebody moves house and their bill does not follow them to their new house or if they change phone providers and cancel their contract, unaware that there is an outstanding balance still to be paid.


Poor credit, in particular, defaults, county court judgements, and missed mortgage payments can badly affect the chance of obtaining a mortgage and these can continue to cause problems for many years, particularly if unresolved bills are not repaid so it is essential that you keep track of your credit and identify problems before they happen rather than after the event


How to ensure your mortgage approval options are not affected by poor credit


Sign up to one of the major credit reference agencies


Sign up to one of the major credit reference agencies, Equifax or Experian and get a copy of your credit report. You can usually opt in to receive notification on anything that is likely to be detrimental to your credit such as a report of a missed credit commitment. If you are short of money you can sign up for a 30 day trial in which time you can obtain a copy of your report and then cancel your subscription free of charge before the end of the 30 day period.


Find out how to improve your credit score


You can speak to the advisers at the credit reference agencies and get advice on how to improve your credit score. They will be able to advise you on methods of improving your score such as being registered to vote and registered for council tax.


Obtain credit and use it wisely


It is a common misconception that people have that if they don’t have any debts then they should get approved for a mortgage easily. This, however, is actually not the case. The fact is that lenders are much more comfortable with lending to somebody who has a history of having and repaying credit than lending to someone who has no track record of demonstrating an ability to repay debts.


It is therefore, advisable to actually take out credit cards and use them but ensure that you pay off the balance each month and never be late making payments!


Obtaining An Agreement in Principle





Once you have established that your credit is in good shape then the next stage is to obtain an agreement in principle. These are non-binding agreements by mortgage lenders to give you a mortgage and are very useful as they help persuade estate agents that you are a good bet for the property and make it much more likely to have your mortgage offer accepted.


Speak to an Independent Mortgage Advisor who can advise you on the best lender based on your own individual circumstances