Would you lend money to someone who you deemed irresponsible and lacking the ability to make repayments? The major lenders, like the banks and building societies, ask the same questions before releasing mortgages. Part of their process is to check your credit score/rating.

They will use this information to decide whether to, firstly lend you funds, secondly how much to lend and thirdly, the rate of interest and period of repayment.

Showing that you are capable and responsible, by having a good credit score, will much advance the possibilities of getting a mortgage.

How do I check my credit score? The 3 main CRA’s (Credit Reference Agency) in the UK are Experian, Equifax and TransUnion. Each will hold a credit report on you, although they might differ slightly. Your credit report will include the following information:

• Details of all credit accounts (banks, credit cards, loan agreements, utility company debts, etc) and your repayment history.
• Financially linked people, with whom you may hold a joint credit facility.
• Public record information – County Court Judgments (CCJs), house repossessions, bankruptcies and Individual Voluntary Arrangements (IVAs). Each of these may stay on your credit record for at least 6 years.
• Your name, date of birth, current and previous addresses, details on the electoral role.
• Fraud convictions.

Linked to your credit report AND to the lenders consideration of your mortgage application, are further considerations. Have you handled your bank accounts and credit cards effectively and responsibly? If you can answer YES to this, then you are off to a positive start. Have you withdrawn cash on your credit card? This can be seen as a negative that you haven’t managed you bank account efficiently. Have you missed any repayment dates? Lenders are not going to be keen on issuing mortgages to poor repayers. Despite having a bad credit score, have you continued to apply for credit? This will be detrimental to any mortgage application Finally, cancel and destroy any unused credit cards. This can be misleading as to the total amount of credit currently available to you. If you are concerned about your credit score, and/or would simply like to chat about your credit rating and its implications on your mortgage application, please contact us here at Reach 4 Mortgages. Our expert mortgage advisers will offer advice and guidance to help your application go ahead as smoothly as possible. Simply call us today to arrange either a face to face or over the phone appointment.

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