What credit score is needed to buy a house?

Are you wondering what credit score is needed to buy a house? As a rule of thumb, the higher your score, the more likely your mortgage application will be approved — but there’s no magic number for instant approval.

Instead, it’s a little more complicated. Your credit score is only one of a range of factors mortgage lenders consider when deciding if you qualify for a loan. Here, we explain everything. 

What is the minimum credit score I need to get a mortgage?

Let’s start by quickly busting a popular myth: There’s no minimum credit score required for a mortgage. 

A “good” or “excellent” credit score alone won’t get you a mortgage offer. While it’s a solid jumping-off point, you need to think of it as more of a guide than a guarantee. This is because your score is just a signifier of the risk to a lender. 

• Having a high credit score suggests that you’re seen as a lower risk customer in the eyes of a mortgage lender. It indicates you’re likely to make your repayments on time and in full, based on your credit history. A good credit score suggests you have a good chance of mortgage application success, but it doesn’t mean you’ll always be accepted.

• On the other hand, having a low credit score indicates that you’re seen as a higher risk to some lenders. If you have outstanding debt or a history of missed payments, it could lower your chances of being accepted. But, importantly, it doesn’t always mean you’ll be declined. It’s not the only thing that lenders take into consideration.

It’s easy to forget that every lender is different. They all have specific criteria you need to meet to qualify as a potential borrower, and your credit score is only part of the equation when they’re making their decision.

What else do lenders check during a mortgage application? 

Most mortgage lenders are likely to look at a combination of these factors before deciding whether to lend you money to buy a property:

1. Your affordability 

When you apply for a mortgage, you need to share information about your employment status and your monthly income and expenses, including fixed costs like car finance, council tax, childcare, and utilities. Armed with this info, lenders will work out your “mortgage affordability”—in other words, your ability to repay the amount you want to borrow in addition to your other financial commitments.

Many lenders will also “stress test” that number to see if you could continue to make your repayments even if interest rates (and your monthly payments) went up. 

2. Your credit report 

Looking beyond the headline score, lenders will comb through your credit report to check public records such as County Court Judgments, insolvency events, including bankruptcies or IVAs, and Electoral Roll records. They want to see if you’ve ever been taken to court over the failure to repay money or if you’ve moved around a lot. Most lenders like stability.

They’ll also dig deeper into your credit history to see what you owe on credit cards or other loans, and whether you’ve reliably paid credit back on time.

3. Their own lending policy 

Finally, they’ll score everything they’ve learned about you against their own internal lending policy (i.e. their idea of an ideal customer) before making a final decision. 

Different lenders have different appetites for risk. Some are strict and avoid risk, while others are a little more lenient. It’s wise to not get too downhearted if you get rejected by a mortgage lender. Chances are, there’s a lender out there that will want to work with you, even if you do have a lower credit score right now (more on that later). 

What is a good credit score?

The UK has three main Credit Reference Agencies (CRAs)—Experian, Equifax, and TransUnion. Each one uses their own unique scoring system, meaning you’ll see a different number depending on which one you check and they all have a different ‘good’ score. 

Here’s the ranges for each CRA:

• Equifax – 0 to 1000

• Experian – 0 to 999

• TransUnion – 0 to 710

You might have a lower credit score if you have a history of missed payments or if you’ve defaulted on a loan within the last six years. There are other reasons, too. But your credit score is just a guide, so a poor credit rating doesn’t mean home ownership is off the table. 

Read more: Why is my credit score low? 10 reasons

Checkmyfile’s scoring range

Checkmyfile gives you the most detailed online credit report you can get, combining all three credit reference agency reports into a single report – our scoring system ranges from 0-1000. 

Can I get a mortgage with poor credit? 

Getting a mortgage with “poor” credit can be tricky — but it’s by no means impossible. 

A low credit score can make you seem a bit riskier to a mortgage lender, and while some might reject you, others will be willing to take that risk. They’ll simply offset it by charging you a higher interest rate or asking for a larger deposit. 

If you want to access lower mortgage interest rates and have a wider choice of deals, to make that happen you’ll need to boost your credit score before you apply. 

How can I improve my credit score before applying for a mortgage?

There are plenty of ways to grow your score, whatever your goal. Whether you’re building your credit history from scratch, improving the good score you have right now, or repairing a low score after a few missed payments, you have lots of options. 

Here are some of the best credit score improvements you can make before applying for a mortgage. Some are quick fixes, while others might take a little longer to have an impact: 

• Register to vote: Registering to vote gets you onto the Electoral Roll, which helps lenders confirm your name and address. They use this to reduce the risk of fraud and assess your stability (i.e. if you’ve been at one address for a long time, this may be considered a positive sign). You can register online — it only takes around 5 minutes. Once registered, the info can take 1-3 months to appear on your credit report.  

• Make your payments on time: It might seem obvious, but the best way to build and improve your credit score is to be consistent with your payments over a long period. By knowing when bills are due (and having enough money in your account to pay them), you can steadily increase your credit rating and avoid missed or late payments.  

• Use credit responsibly: Mortgage lenders want to know that you’re reliable with repayments. Only using your credit card for purchases you need, and know you can afford, each month will help you build up a track record of responsible credit management. 

• Close any unused credit cards: On the flip side, having too many credit card accounts open at once shows you have access to a lot of credit. Lenders may not want to provide you with any more in case it becomes unaffordable for you to pay it back. It may help to close old accounts that you’re no longer using, although bear in mind this can temporarily lower your credit score because you’ll subsequently have a less active positive repayment history.  

• Keep credit utilisation low: Credit utilisation is your credit usage compared to your credit limit. For example, if you have a credit card with a limit of £1,500, and you’ve spent £150, your credit utilisation would be 10% (150/1500 x 100). It’s possible that using too much credit and getting close to your limit could impact your credit score. This is because a high credit utilisation rate can suggest an over-reliance on credit, so is something that lenders may take into consideration when deciding on the outcome of applications. To be on the safe side, it’s recommended to try to keep your utilisation to 30%. The logic is that this level of usage indicates that you actively use credit, but you don’t rely too heavily on it. 

• Check your credit report for errors (and fix them): Even the slightest mistake in your credit report could drag your score down. Go through your report carefully to ensure your current and previous addresses are correct and all of your payment is accurate. If you spot an error, contact the company in question and ask them to fix it. If you have any trouble, Checkmyfile can help you with this. 

• Encourage your partner to do the same: If you’re planning to take out a mortgage with a partner or spouse, it’s vital that they check their credit report too. This is particularly important if they’re a financial association (in other words, someone linked to you financially via a joint account). If their credit score is poor, it could affect the outcome of your applications, too.

• Try not to apply for credit for six months before your application: If possible, it’s a good idea to avoid making any credit applications in the six months before applying for a mortgage. Every time you do, a hard search is recorded on your credit report. Too many hard searches in quick succession can lower your score, as lenders don’t see the outcome of the application, they could determine that lots of credit applications signifies lots of rejections or a desperation for credit. 

How do I check my credit score for a mortgage?

The easiest way to keep tabs on your credit score in the lead-up to a mortgage application is with Checkmyfile. 

We break down up to six years of credit history into one simple-to-use, independent and highly confidential review. Here, you can understand your habits, pinpoint patterns and spot any errors that could be impacting your overall credit health — without affecting your score. Get started now