What your credit agency credit score means for you

fair or excellent?

Does your credit score matter

If you have received a copy of your current credit report from one of the major UK providers you may well have seen a personal credit score and rating listed at the top of the report.

Credit score – the popular view

We often find that clients refer to these ‘scores’ when talking to us about their mortgage applications.

Some see them as confirmation that they are in trouble ‘my score is poor at 355 but my partner has 502’.

Other see them as a badge of honour ‘my credit rating is excellent, I have 900 points’.

Credit score – the reality

The reality is that it is the content of your credit report that dictates your mortgage options.

The payment record on each credit account will be a factor and your ‘score’ is not used by the mortgage lender to make their lending decision. This can be confusing for the applicant as lenders often use the phrase ‘credit score’ but this does not mean the ‘credit score’ listed by the credit agencies on your credit report. When lenders talk about credit score they refer to their own overall assessment of your case covering all factors, including loan to value, employment, outgoings, and debts. This includes your credit history but is much broader in its reach.

Credit score – the problem

To give you an idea of the irrelevance of your credit agency credit score to a mortgage lender we recently had a client come to us with a score ‘999 excellent’.

This client had a credit report showing several thousand pounds worth of county court judgements, six months mortgage arrears, and numerous defaults. Not one we will be presenting to a high street mortgage lender any time soon.

Worry about credit report not credit score

Do not let any of this put you off obtaining a credit report from a credit agency before you submit a mortgage or re-mortgage application. It is the nuts and bolts of this report that helps your independent mortgage broker decide where you can obtain lending.

How to obtain your credit report for free

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