Your credit score

what credit score is needed to buy a house

Credit Score for Mortgages: Unlocking the Door with a Mortgage Broker

The path to homeownership often hinges on a crucial number: your credit score. This three-digit figure summarizes your borrowing history and plays a major role in determining your mortgage eligibility and interest rates. But what exactly is a good credit score for a mortgage, and how can a mortgage broker assist you in navigating this process?

Check out our brief video below ⬇️

The first thing to understand is that your credit score is just that, a score, nothing more than a number; it’s not the full picture. Though clearly, a low score isn’t as good as a high score and each credit rating agencies that you can approach directly for a copy of your score will provide you with their own score and each credit rating agencies has a different viewpoint on what is good and bad for your score.

Additionally, every single lender also has its own internal credit score for you and some lenders will be relaxed about certain points that affect your score, whereas other lenders would outright decline and not consider your application. 

Your mortgage broker at this point will be invaluable as firstly they will ask for a copy of your credit file to get a basic outline of your situation and then once they understand your full circumstance will be able to place you with the lender that would most likely accept your application.

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Georgiana Olescu
Georgiana Olescu
2024-04-10
Paul is an amazing broker, very helpful, responsive to emails and patient with customers. The process with him was quick and easy as his work ethic is impeccable. We are beyond impressed and happy with his services and that we got to work with him.
Valerie O
Valerie O
2023-12-28
Exceptional service provided by Paul, I could not have asked for better. Definitely does his due diligence and goes above and beyond. Highly recommended!
Bonnie Frost
Bonnie Frost
2023-12-25
Paul is a fantastic advisor and guided my husband and myself through the entire process of buying our first home, he made the entire process feel easy and we were well informed along with great communication and fast action. We completed within 3 months of contacting Paul.
Johnathan Lowery
Johnathan Lowery
2023-11-16
Working with Paul has been a hugely positive experience. Paul took the time to understand our needs and financial situation, ultimately securing us a mortgage deal that we would not have been able to obtain on our own. His guidance and patience over an extended time was invaluable in guiding us through a volatile period in the property market. I highly recommend working with Paul at Your Property Financial.
Adeel Sarwar
Adeel Sarwar
2023-10-02
It has been great working with Paul. He helped us to redeem our help to buy equity loan which didn't seem possible to me when I first contacted him. It took much longer than expected due to many obstacles but Paul explained every step of the process very clearly and he regularly communicated with me to ensure the remortgage went through as efficiently as possible. I would definitely recommend working with Your Property Financial.
Jessica
Jessica
2023-08-29
I would highly recommend Paul as a mortgage broker. As a first time lone buyer I began the process feeling very out of my depth, particularly in a market where mortgage rates are very high. But from the get go Paul provided reassurance and practical guidance and has been immensely helpful throughout the process. I've really appreciated his responsiveness, honesty and support.
Louise Griffiths
Louise Griffiths
2023-08-28
I reached out to Paul 2 years ago and giving this review now because I wanted to ensure that I could give a true review of what benefits I have experienced from using his service. I am thrilled with the financial expertise given to me by Paul. His skillful negotiation secured me an excellent mortgage rate within a short turn around time. This has not only set me on the path to paying off my principal balance but has also allowed me to simultaneously build a solid emergency fund. His initial guidance has been invaluable in shaping my financial future. I look forward to working with Paul again, once my 5 year plan is near its end. Highly recommended!
Calum Hebron
Calum Hebron
2023-08-05
Paul has been consistently excellent, ensuring we got the best possible mortgage deal at a time when rates weren't great. Paul worked with us to understand our financial complexities and went above and beyond to ensure they were understood by mortgage providers. We've been made to understand every stage of the process, and as first time buyers we were able to feel confident in the decisions we made. I would highly recommend working with Paul at Your Property Financial.
Czarina
Czarina
2023-08-04
My almost a year-long journey with Paul as my broker has been truly amazing, despite a few hiccups during the mortgage process. Working with him has been the best decision ever! As a first-time buyer, I lacked knowledge about purchasing a home, but Paul's guidance and expertise were outstanding. He explained things in a clear and concise way. What impressed me the most was Paul's responsiveness. He promptly addressed all my questions and concerns, never making me feel like a bother. Even when I faced challenges, Paul's determination and problem-solving skills were unwavering. I felt so supported throughout the entire process. Thanks to Paul's unwavering support, I managed to reach this point. I highly recommend him to anyone, especially fellow first-time buyers. Paul's knowledge, patience, and reliability are unmatched. He's not just a broker; he's an invaluable ally in this complex process. Thank you, Paul!
Alistair Prestidge
Alistair Prestidge
2023-07-11
Paul helped me to get my Mortgage approved in less then 48 hours! He has been great and I can’t recommend him highly enough. His communication is excellent, and he helped me understand each stage of the process easily. Thank you so much for helping me buy my very first home! I will most certainly be recommending Paul to friends & family!

Your Property Financial mortgage broker’s own knowledge and experience of many years will often prove invaluable at this point but equally, your mortgage broker will be well connected with the different lenders. This means they can speak directly with their Relationship Managers and Underwriters at the different banks so they can actually talk through your application individually and avoid a “computer says no” decision but actually get the lender to consider your application. 

mortgage credit score for loan

CHECKMYFILE CREDIT SCORE

Your Credit Score is a measure of the probability of you defaulting on a credit agreement. Scores range between 0 (high probability) and 1000 (low). An average score, based on the checkmyfile scorecard, is 750. Credit Ratings range from 1 star (poor) to 5 stars (excellent). The average Credit Rating is 3 star.

There is no single Credit Score, most lenders and organisations accessing your Credit Report will utilise their own credit scorecard when making lending decisions and not those of the Credit Reference Agencies themselves. The organisation checking your Credit Report may check one or more of the Credit Reference Agencies and will be able to see varying amounts of data depending on what type of organisation they are – if you are credit active you will see in your search history that it is often the case that multiple agencies are checked.

*(Try it FREE for 30 days, then £14.99 a month – cancel online anytime. Please be aware that by clicking onto the above link you are leaving the Your Property Financial Ltd website. Please note that neither Your Property Financial Ltd nor PRIMIS are responsible for the accuracy of the information contained within the linked site accessible from this page).

There are also 3 main different credit rating agencies and different lenders use different credit rating agencies so again your mortgage broker will know which lenders use which so if one of the credit rating agencies had a particularly low score on you for no apparent reason they could potentially approach a different lender who uses a different agency. A very technically point but not to worry your mortgage broker will be able to help you with this. 

The 3 main credit reference agencies are 

✅ Showing that you can pay your bills on time and are responsible for any debts to date is a big tick for the lenders as they like to know you will actually make those monthly payments on time each month. There are several things you can do to improve your credit score. 

✅ Firstly paying your bills on time is the best start and if you’ve ever had any problems in the past don’t worry your mortgage broker will be able to help you navigate the different options available to you and will often have the contacts at the different banks directly to call them up and talk them through your situation if needed. 

Let’s look at other areas that can help improve your credit score. 

✅ Keeping your debt utilisation threshold low helps- what is that you’re thinking? Simply put it’s the amount of debt you have outstanding versus your credit card limits. So as an example a £500 credit card debt vs a £1,000 credit card limit would mean your debt utilisation is at 50%. 

✅ Typically you want to keep this to around 20-30% to firstly avoid it reducing your score, the debt not being so large that it starts to affect your mortgage affordability and this calculation is applicable across all your card limits. Do be careful if 1 card is on or near the limit even if you have other cards with zero balance on as this card could look like there is a problem. The same applies if you pay these cards off in full each month. Though you’d think it looks good that you can meet the full balance bill each month, unfortunately, the algorithms that sit behind this don’t really work like that and will assume your running balance is near or maybe even about to breach its limit. 

✅ Any balances showing on your credit file can be taken into consideration. So if you’re looking to apply for a mortgage shortly ensure you clear your credit cards a good 2+ months ahead of any application being submitted as it can take this long for the credit files to update and some lenders, unfortunately, can take a stance (even when you can show them that you’ve repaid it) that if it’s showing on the credit file, they’re going to still a factor that in. Your mortgage broker will help with this if this is the case and ensure the lender you progress with is appropriate for you depending on your situation. 

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✅ If you’ve never had any credit cards or loans before this can (as odd as it sounds) work against you as the credit rating agencies and in turn, lenders have nothing to go off, as you’ve got no credit history at this point. This can be a concern as some lenders (through their internal credit scoring algorithm when you apply) actually could even decline you. This is something your mortgage broker will have a lot of experience with so will be able to avoid it and you can also do some basic things to help improve your credit score now. 

✅ A way to help improve your credit score if it is low is applying for a credit card that you’re highly likely to be approved for (many credit card providers let you do a soft search apply to see if you’re likely to be accepted to avoid any negative marks on your credit file) and then to use this card to show you’re responsible with a credit facility. 

✅ Now we’re not suggesting borrowing money to prove you’re good with money, as that would incur interest and not be advisable, but rather use the credit scoring system to your advantage. An example of this would be to apply for a credit card, be accepted, set up the direct debit to pay the full balance when it’s due so you never pay any interest, and then use it once a month for a small purchase. 

✅ So 1 week of grocery shopping as an example, when you get home you put the card back in a draw and wait until that bill falls due and is then paid automatically by direct debit. That way it’s treated like a delayed debit card essentially as you were only buying something you could have paid for with a debit card but now on a credit card, it will show (provided you pay it on time so remember to set up your direct debit for the full balance) as a successful payment made and a nice green tick that month for your credit report and this repeated month after month will help to show a satisfactory repayment history on your credit file. 

✅ Make sure you’re registered on the electoral roll and ensure your bank has the correct address where you currently live. If you’ve got a phone contract this being in your name also helps as do some energy providers.  

Read on to find out how you can use your savings to reduce your monthly payments and term of your mortgage with the ➡️ “Offset Mortgage”

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