Search Profile

Find Properties:

Use my current location
AdvancedBasic search
Draw a search

The importance of your credit rating when applying for a mortgage

Mon 15 May 2017

Getting a mortgage can seem like a very daunting task, but it doesn’t need to be, as there are a number of small things you can do that could greatly increase your chances of getting your dream home. 

The important thing to remember is that every lender is different in what they view as the ‘perfect candidate’ to lend to. Just because you don’t fit one lender’s criteria, doesn’t mean you won’t fit another’s.

What does a lender judge me on?

There are a lot of factors that go into a lender deciding whether it can lend to you or not. These can range from the size of the loan you want to take out and your outgoing costs, to your credit rating and employment status.

Is my credit rating that important?

Your credit score enables lenders to see that you have the financial means and discipline that will be required to pay back your mortgage. Key things lenders will check include your history of repayments, so if you have any ‘black marks’ where you have missed payments on credit cards, catalogues or any other existing debts within the last three months, this may hinder your chances.

It isn’t just your score that you need to be aware of, either…

Unfortunately, break-ups happen, so if you’ve got financial links to someone else, such as a joint bank account from a previous relationship, you will need to sever that link. If your ex-partner, or whoever the account is linked to, makes a late payment or any other credit mishap, it will reflect on your own report.

To distance yourself from the joint account, you can write to the credit agencies and ask for a ‘notice of disassociation’.

Managing your credit…

It sounds obvious, but managing your credit availability is imperative when looking to secure the deal that you want.

Your ‘credit’ isn’t just your credit card limit. It’s also your debit balances on your bank accounts and overdraft limits.

The key is to get the right mix between the two. If you do have debts, credit experts suggest that they should make up less than 50% of your available credit, so if you have a £5,000 credit card limit, you should spend no more than £2,500.

Don’t apply for credit shortly before a mortgage

When applying for a mortgage, your last three months’ account statements will come under scrutiny. Because of this, it’s a good idea to avoid applying for credit at this time as it could lead to rejection, putting a dent in your chances.

If you have to apply for credit and end up getting rejected, do not apply again straight after. Lenders search your file every time you do a “hard search” for credit – be that for a mobile phone contract or a new credit card – and the more that you apply, the more ‘frantic’ your spending looks.

Managing your credit is just one part in ensuring that you give yourself the greatest chance of getting the right deal for your circumstances. Applying for a mortgage can be a scary prospect, but, with the help of a professional mortgage adviser, it doesn’t need to be.

For further information please contact Brown & Cockerill Mortgage Services on 01788 551111 or visit  brownandcockerill.co.uk

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP YOUR REPAYMENTS ON YOUR MORTGAGE.  IN GENERAL BUY TO LET MORTGAGES ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.

News Archive

October 2018

Taxes Payable by Landlords & Investors - A Guide

August 2018

We win GOLD for the 3rd year running.

May 2018

The Facts - Energy Performance Certificate (EPC)

February 2018

Relocation Experts Recognised at Brown & Cockerill Estate Agents

November 2017

Chancellor abolishes Stamp Duty for First-Time Buyers in England and Wales in his Budget

The Team Attends National Estate Agency Conference and Exhibition.

October 2017

Brown & Cockerill win Silver at National British Property Awards

It's Official - We are the Best in Rugby!

October 2017

The Pros and Cons of 'Online' Estate Agents

Top tips for reducing condensation

October 2017

The importance of your credit rating when applying for a mortgage

Thinking about selling but worried about the length of your lease?

October 2017

Tenant Referencing - what you need to consider

October 2017

How to Spot and Tackle Japanese Knotweed

October 2017

10 things to do before applying for a mortgage

HOUSING WHITE PAPER: The Key Points

October 2017

Woodworm Treatment - The ins and outs that you need to know

October 2017

Selling Your House? Don't Wait for the New Year!

November 2017

Brown & Cockerill Offer Clients a Relocation Agent Specialist

November 2017

Brown & Cockerill win GOLD for Best Estate Agent in RUGBY!

November 2017

Lettings: A Guide to Deposit Protection Schemes

Property Jargon Buster - a glossary of terms

November 2017

Thinking of Buying a Second Home? a guide to stamp duty changes.

November 2017

Rents Rising Across Most of the UK

November 2017

Keeping a Property Tenanted

Brown & Cockerill Help Home-Movers to Celebrate!

November 2017

FEBRUARY is here which means it is the month of LOVE

This Year We Are Celebrating Our 20th Anniversary !

November 2017

Help to Prevent Damp & Mould

Do your tenants have the Right to Rent?

Proposed New Stamp Duty Rules

November 2017

Buying or selling a property with asbestos?

Gazundering: A guide to what it means and how to avoid it!

November 2017

The Team Attends National Estate Agency Conference