Imagine finding your dream home, only to have your mortgage application rejected because of your credit score.
This happens to thousands of hopeful home-buyers each year.
A poor credit score can put your property dreams on hold, force you to pay higher interest rates, or severely limit how much you can borrow.
But here’s the good news – you can take control of your credit health. With some smart changes to how you handle your finances, you can boost your score and significantly improve your chances of getting your mortgage approved.
While there’s no magic wand, improving credit takes time, even small improvements can make lenders view your application more favourably.
Decoding Credit Scores: What Mortgage Lenders Really See
When you apply for a mortgage, lenders want to know if you’ll repay what you borrow.
Your credit score gives them a quick way to assess that risk, but how these scores work in the UK often confuses people.
The three main UK credit reference agencies use different scoring systems.
Experian scores range from 0-999, Equifax from 0-700, and TransUnion from 0-710. This means what counts as ‘good’ with one agency might only be ‘fair’ with another.
What makes this even trickier is that mortgage lenders don’t just look at the number. They examine your entire credit report, which shows your credit accounts, payment history, public records, and financial connections.
Lenders then use their own internal scoring systems, based on your credit profile.
“There’s no universal ‘good’ score for mortgages,” explains Sean Horton from Respect Mortgages. “Each lender sets their own acceptance thresholds based on their appetite for risk. Some specialise in helping borrowers with lower scores, while others only work with those who have spotless credit records.”
This explains why you might be rejected by one lender but accepted by another. It’s not just about hitting a magic number—it’s about finding a lender whose criteria match your circumstances.
How Your Credit Score Affects Your Mortgage Application
Your credit score does more than just determine approval—it can significantly impact how much you pay for your mortgage.
Each lender has their own rules, or criteria, for the types of borrowers that they want. This will include employment status, minimum income and personal credit.
If your credit status excludes you from some lenders then this reduces the choice you have.
Fast-track Your Credit Score
If you’re planning to apply for a mortgage soon, several steps can improve your score within 3-6 months.
First, register on the electoral roll. This simple step helps verify your identity and address, which is crucial for credit scoring. You can check if you’re registered through your local council or at gov.uk/register-to-vote.
Next, check your credit reports for errors.
Even small mistakes like a wrong address or incorrectly recorded payment can drag down your score. You have the right to request a statutory credit report from each agency, though many now offer free access online. If you spot errors, report them promptly.
Another quick win is to reduce your credit utilisation—the percentage of available credit you’re using.
Aim to keep this below 30% on each card and across all your credit accounts. For instance, if your credit limit is £1,000, try to keep your balance below £300.
Space out your credit applications. Each application triggers a ‘hard search‘ on your file, which temporarily lowers your score. Avoid applying for any new credit in the six months before a mortgage application.
Finally, make sure all your bills are paid on time by setting up direct debits. A single late payment can harm your score for up to six years.
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Building a Positive History
Building a positive credit history is essential, particularly if you’re new to credit or have limited history.
Having bills in your name is an easy way to start.
Utility contracts, mobile phone plans, and broadband services all count as a form of credit in the UK when they’re paid monthly. Each on-time payment helps demonstrate your reliability to future lenders.
Using credit cards carefully is another useful method.
A common misconception is that avoiding debt completely will result in a perfect score. In reality, lenders want to see evidence that you can manage credit responsibly. Using a credit card for everyday expenses and paying the balance in full each month shows you can handle credit without falling into debt.
For those with limited credit history, consider a credit-builder card.
These cards usually have lower credit limits and higher interest rates but are easier to qualify for. Use it for small, regular purchases and set up a direct debit to pay the full balance each month.
Managing Credit Cards Effectively
Credit cards can be your best friend or worst enemy when it comes to your credit profile. Used strategically, they’re one of the most effective tools for building a strong credit profile.
Credit utilisation, the percentage of your available credit that you’re using, is particularly important. Credit experts recommend keeping your utilisation below 30% on each card and across all your cards combined.
A common question is whether to close unused credit accounts. While it might seem logical to close cards you don’t use, this can actually harm your score by reducing your total available credit and shortening your credit history if it’s an older account.
“I advise clients to keep old credit accounts open but use them occasionally for small purchases,” says Sean Horton. “Just buying petrol once a month and setting up a direct debit to pay the balance keeps the account active while contributing positively to your credit history.”
Paying just the minimum amount every month suggests you might be struggling financially. Paying your balance in full shows you’re in control of your finances, exactly what mortgage lenders want to see.
Read more: What is Your Credit Utilisation Ratio?
Tackling Credit Report Blips and Black Marks
Negative marks on your credit report don’t have to be permanent barriers. Understanding how different issues affect your score can help you develop an effective recovery plan.
In the UK, most negative information stays on your credit file for six years, including late payments, defaults, County Court Judgements (CCJs), Individual Voluntary Arrangements (IVAs), and bankruptcy.
The impact of these issues diminishes over time, especially if you demonstrate good credit behaviour afterwards. A missed payment from five years ago will affect your score much less than one from last month.
If you have defaults or CCJs, check if you can settle them. A ‘satisfied’ default or CCJ looks better to lenders than an ‘unsatisfied’ one, though both will remain on your file for the full six years.
For special circumstances that led to credit problems—such as illness, redundancy, or divorce—you can add a ‘notice of correction’ to your file. This is a brief statement explaining the circumstances behind the negative markers.
While it won’t remove the issues, some lenders take these explanations into account during manual underwriting.
Rather than using credit repair companies, which often charge high fees for services you can do yourself, focus on building positive credit history alongside addressing these negatives.
Related: Credit Score Gone Down? Here’s What You Need to Know
Checking for Fraud and Errors
Your credit report might contain mistakes that are dragging down your score without you even realising it. Regular monitoring is essential, especially before applying for a mortgage.
Common credit report errors include accounts belonging to someone with a similar name, duplicate accounts, closed accounts still showing as open, incorrect payment statuses, and outdated personal information.
If you spot suspicious activity, contact the credit reference agency immediately to report the potential fraud and request a correction. You should also inform Action Fraud, the UK’s national fraud reporting centre.
Several free services in the UK let you monitor your credit file, including ClearScore, Credit Karma, and Money Saving Expert’s Credit Club. For the most thorough check, review all three reports at least once a year.
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How a Mortgage Broker can Help
Working with a mortgage broker can significantly increase your chances of approval, especially if you have credit challenges.
Brokers have access to the widest range of mortgage products, including those from specialist lenders who don’t deal directly with the public. These specialist lenders often take a more flexible approach to credit issues.
Brokers understand the specific lending criteria of different mortgage providers. They know which lenders might be more lenient about certain types of credit problems.
“Each lender has their own ‘appetite’ for different types of risk,” explains Sean Horton. “A good broker knows these nuances and can match you with lenders most likely to accept your specific situation.”
Brokers can also help present your application in the best possible light, explaining any mitigating factors around past credit issues. They often have relationships with underwriters and can advocate on your behalf.
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Timing Is Everything
Creating a realistic timeline can help you set expectations and prioritise actions based on when you hope to apply for a mortgage.
For short-term improvements (1-3 months before application), check all three credit reports for errors, register on the electoral roll, avoid new credit applications, pay down credit card balances, and ensure all bills are paid on time.
For medium-term goals (3-6 months before application), continue reducing existing debts, use credit cards responsibly, ensure all addresses are up to date, add a notice of correction if needed, and close unused store cards while keeping older credit accounts open.
For long-term credit building (6-12+ months), establish a consistent pattern of on-time payments, build a diverse mix of credit types, save regularly, reduce any remaining debt, and allow time for past negative items to have less impact.
Remember to ‘freeze’ your credit improvement efforts about three months before applying for a mortgage. This means avoiding new credit, maintaining low balances, and not making any significant financial changes.
What Lenders Want To See On Your Credit Report
Your credit report tells lenders a story about how you manage money. But what exactly are lenders looking for, and how can you make sure your report shows you in the best light
Next Steps
Request your statutory credit reports from all three UK credit reference agencies, review them carefully for errors, and dispute any inaccuracies promptly.
Create a personalised credit improvement plan based on your specific circumstances, focusing on the issues that are having the biggest impact on your score first.
Check your electoral roll status and register if needed. Make sure all your accounts have your current address too.
Consider speaking with a mortgage broker for personalised advice, especially if you have past credit issues or an unusual financial situation.
Set realistic expectations about timeframes. Major credit improvements typically take at least 3-6 months to show significant results.
Remember that your credit score is just one factor in mortgage approval. While working on your score, also focus on saving for a deposit, ensuring your income is stable and well-documented, and reducing any non-credit debts.
By taking control of your credit health today, you’re taking a significant step toward making your home-ownership dreams a reality.
Frequently Asked Questions
There’s no universal minimum score as each lender sets their own criteria. However, Experian scores above 700, Equifax scores above 420, and TransUnion scores above 575 generally increase your chances. Remember that lenders look beyond just the score number at your overall credit history.
Read more: What credit score is needed for a mortgage?
Credit reference agencies tend to update borrower profiles once a month.
Some improvements can show results within 30-60 days, such as registering on the electoral roll, fixing errors, or reducing credit utilisation. However, more significant improvements typically take 3-6 months of consistent positive credit behaviour, and serious issues like defaults take longer to overcome.
No, checking your own credit report creates a “soft search” that only you can see and has no impact on your score. You can check your credit reports as often as you like without affecting your mortgage application.
Yes, but it’s more challenging.
Some specialist lenders will consider applications with CCJs, particularly if they’re older (3+ years), have been satisfied (paid off), or were for small amounts. You’ll likely need a larger deposit and may pay higher interest rates.
Read more: Bad Credit Mortgages
If you’re applying jointly, yes. Lenders will consider both applicants’ credit histories, and the person with the lower score will typically have more influence on the decision. If you’re not financially linked (no joint accounts or previous joint applications), their credit won’t affect yours.
Related:
Credit utilisation (the percentage of your available credit that you’re using) significantly impacts your score.
Keeping utilisation below 30% on each card and across all your cards combined shows lenders you’re not overly reliant on credit. High utilisation, even if you pay off the balance monthly, can signal financial stress.
Read more: What is Your Credit Utilisation Ratio?
