Why Your Credit Report Is Useful Before Applying For A Mortgage

Why is a Credit Report Required?

Many mortgage advisers including myself ask to see a full credit report before starting the research and submitting an application. There are two main reason for this; First is to check your current credit status. The second is to confirm all the credit commitments you have. By having the credit report before submitting an application it should eliminate the application being rejected due to the credit data found by the lenders searches not matching the details included in the application.

What Is Considered A Full Credit Report? 

A full credit report is a breakdown that contains information on your financial behaviour taken from the last six years of your credit history. It provides a summary of your finances, including things like your mortgage, credit cards, overdrafts, loans, mobile phone contracts, and even utilities such as gas, electricity and water. There are also public information shown such as your electoral roll information and things like county court judgements.

How To Download Your Full Report

So when you come to downloading your report the score itself is not enough. You can download your full report from various different companies now days but the main two are Experian and Equifax. To download a full credit report from Experian you need to sign up to there ‘Expert Pro’ Subscription which is £14.99 per month but they are currently offering a 30 day free trial so once you have downloaded the report you need to cancel the subscription otherwise you will be charged after 30 days.

What Lenders Are Looking At

Different lenders look for different things when looking at your credit history and deciding whether to lend to you. But basically the higher your credit score the better chance you have of getting a mortgage with a mainstream lender who have lower interest rates and better options. This basically helps to predict how much of a risk you are to the mortgage lender.

The things that may cause an issue for mainstream lenders are things like; missed or late payments on credit cards or unsecured loans, defaults, CCJ’s, Debt Management Plans and missed mortgage payments. But if you do have any of these things that doesn’t mean you cannot get a mortgage. Some mainstream lenders do allow a small amount of adverse and there are sub prime lenders that accommodate higher levels of adverse but they do have higher interest rates. 

How to Improve your Score

One of the most important factors is to make credit payments on time! This ensures you don’t get any extra charges and avoids having any missed or late payments shown on your credit report. If you have missed payments in the past but can then maintain the payments it will improve your score.

Another common method for not only people with a lower score but for people without much credit history is to get a credit card. Spend a small amount on it and pay the card off in full every month. As well as raising your credit score, this also shows lenders you only use a small percentage of the available credit on offer, one key factor that credit agencies look at. Lenders can also reject customers who do not have much credit history.

To find out more please read this article on how to improve your credit score.

Things To Consider Before Getting A Mortgage

  • Avoid applying for credit in the six months before your mortgage application. Each time you apply for credit, a hard search is recorded on your report. Too many of these can make it look like you’re overly reliant on credit.
  • Register to vote, as being on the electoral register helps lenders confirm who you are and where you live.
  • Stay within your credit limits. Try and use as little of your limit as possible, anything below 25% will be improve your score.
  • Check that everything is correct and up to date on your credit report and if its not contact the company. Even a small change in the way your address is noted can affect your credit score.


Speak to an adviser today or apply online