Minimum credit score for mortgage

Minimum credit score for mortgage

This page was last updated on 1 September 2021

Minimum Credit Score For Mortgage In 2021

This article guides you through everything you need to know about getting a mortgage with a low credit score. It tells you:
  • Whether there is a minimum credit score for a mortgage
  • If you can get a joint mortgage when your partner has a bad score
  • How to get mortgages when you don’t have a good credit score
  • How you can improve a credit score

Topics that you will find covered on this page

You can listen to an audio recording of this page below.

Can you get a mortgage with bad credit?

Maybe. You can still be approved for a mortgage to buy a property if you have a poor credit score. However, someone with a poor credit score will probably have a higher interest rate than someone whose credit score is good. Buyers with a low credit score may also need to pay a bigger deposit.

There is no minimum for the credit score that you have to have in order to be approved for a mortgage. When you apply for credit, mortgage lenders will instead make their decision based on their company’s lending criteria.

The better your credit score is, the more likely you will be approved for a mortgage loan. This is because there is less risk involved with giving you credit when you have a high credit score. 

Here is a short video on this subject. 

You can see the original video here.

Can you get a joint mortgage if one person has bad credit?

Maybe. Remember that although it may be tempting to try applying for a mortgage with just the person who has a great credit score, most lenders will not allow this.

The first thing that a lender will consider is your relationship. If you are married, you will have to apply jointly for a mortgage. The mortgage lender will look at each credit score and credit report and make a decision based on your joint credit file. 

Lenders consider your income, outstanding credit, employment status, ages, marital status, whether you have joint bank accounts and credit cards, and your experience buying property (if you are an investor, or this is your first time buying a house, etc). 

When you apply, you may be able to provide written reasons for your problems that have damaged your credit score. This can help your application when your credit score is bad.

Lenders are more concerned if one applicant has a low credit score due to:

Issues remain on your credit file and can impact your credit score for up to six years.

So, if these problems happened a long time ago and have been resolved, then they may not be the reason for your low credit score. 

If you are unsure why you have a low credit score, check your credit report for free online. Doing this will let you see what the problem affecting your credit score is, and will give you the opportunity to correct any errors that you find in your credit report.

mortgages with bad credit

Can I get a mortgage with a 600 credit score?

Maybe. It depends on which of the credit reference agencies (CRAs) are being used, as well as the mortgage lender. 

If you have a credit score between 561 and 720 with Experian (the UK’s largest credit reference agency), this is considered a poorer credit score than normal. With this Experian credit score you can get mortgages. But, you will likely have to pay high interest rates.

However, if you check your credit score with Equifax or TransUnion and it is 600, then you are in a fair or good position for applying for a mortgage. 

Remember that each mortgage company also has its own lending policy. Some lenders will be more or less concerned by different aspects of your credit profile.

A few smaller or specialist mortgage lenders receive less applications and so have more time to consider the details you give on your mortgage application. For example, if the credit issues are resolved or if there was a good reason for the blip in your credit history.

All credit providers must be authorised and regulated by the Financial Conduct Authority.

What credit score do mortgage lenders use?

As explained above, the most commonly used mortgage credit scores are the FICO credit scores that you have with the UK’s main three credit reference agencies: TransUnion, Experian, and Equifax.

Mortgage lenders will normally look at your credit score from each of the CRAs when you apply for a mortgage. If a borrower has three different scores according to each scoring system, then they will use the middle credit rating to assess your application.

But, if two credit agencies agree on your credit score, the mortgage lender will just use that credit rating in their assessment.

How to get a mortgage with bad credit

Trying to apply for a mortgage with a bad credit rating can be a frustrating experience. Even if your mortgage application is successful and you buy a house, the risk is that your interest rate will be much higher than if you had a better credit score.

Getting mortgages with bad credit is easier when using a specialist lender. You may also be able to pay a larger deposit or higher interest to show the lender that you are creditworthy despite your low credit score.

First time buyers may also want to consider the possibility of buying a home with a help to buy scheme. The lending criteria for these schemes used to limit loans to a first time buyer with good credit, but nowadays it is possible to get a help-to-buy loan with a specialist mortgage broker even if you have a poor credit score.

How to improve your credit score

However, the best thing for you to do is simply to improve your credit score. Having a higher credit score will massively increase your chances of being approved for a loan, and will mean that you don’t need to pay as much in interest or as a deposit. 

Just making small improvements to your financial behaviour can positively impact your credit score:

  • Reduce your credit card debt and use your credit card responsibly.
  • Put your name on the electoral roll. It just takes a few minutes and will demonstrate stability while helping the credit agencies confirm your personal details.
  • Pay off your utility bills and credit cards loans on time.
  • Avoid going into your overdraft on your credit cards.
  • Check the information on your credit file. As mentioned above, you can do this for free online. You will get the chance to correct any errors due to fraud, and can remove past financial partners who may have been affecting your credit score.
  • Only apply for the credit cards and loans that you need. Making lots of applications for credit at once will damage your credit score because it shows you are in an unstable financial position.

Each of these actions will improve your score. With a better score, low interest mortgages will be easier to get.

Below you can see the best mortgage deals on the market.

See what you can get with your credit score.

Get FREE help and advice in choosing the right one for you.

Learn More About Mortgages In The UK

How do mortgages work in the UK?

Buying a home or land is expensive. A mortgage is a financial product that helps people purchase their own home or land.This is especially true for a first time buyer, as it might be the only route onto the property ladder.

The minimum credit score for a mortgage

ou can still be approved for a mortgage to buy a property if you have a poor credit score. However, someone with a poor credit score will probably have a higher interest rate than someone whose credit score is good. Buyers with a low credit score may also need to pay a bigger deposit.

fixed term Contract Mortgages

A fixed term contract is a way of describing certain types of employment. If your current employment contract is due to end after a certain period of time, or after a specific piece of work is complete, you are likely on a fixed term contract. 

how long does a mortgage application take?

After sending off the final application waiting for the decision can be frustrating. Many prospective homeowners ask ‘how long does it take?’ but the truth is the mortgage approval process is always different for each customer.

how long does conveyancing take?

The entire conveyancing process will normally take anywhere between 8-12 weeks, however you should be prepared for this to take much longer depending on your circumstances and wider factors. This articles explores what the timescale involves.

Mortgages if You are bankrupt

There is no hard and fast rule when it comes to what lenders will accept your mortgage application if you want to get a mortgage after bankruptcy. They will lend to discharged bankrupts and consider each case individually. 

what stops you getting a mortgage?

Everyone wants to get the best deal when it comes to buying a home and getting a mortgage when they buy a home. However, being too ambitious can lead to your application being rejected. 

how much do mortgage advisors charge?

Fees for mortgage brokers can be off-putting. A mortgage is an expensive financial product, and often buyers want to save as much money as possible. This might limit their options when it comes to using a mortgage broker.  However, not everyone advisor charges a fee.

IVA Mortgage

When you have an IVA, mortgage acceptance is still possible. However, involuntary agreement mortgage lenders can be hard to find. Typically, a high street company will be more less keen to give you a mortgage. 

Frequently Asked Questions

Can you get a mortgage with bad credit?

Maybe. You can still be approved for a mortgage to buy a property if you have a poor credit score. However, someone with a poor credit score will probably have a higher interest rate than someone whose credit score is good. Buyers with a low credit score may also need to pay a bigger deposit.

Can you get a joint mortgage if one person has bad credit?

Maybe. Remember that although it may be tempting to try applying for a mortgage with just the person who has a great credit score, most lenders will not allow this.

The first thing that a lender will consider is your relationship. If you are married, you will have to apply jointly for a mortgage. The mortgage lender will look at each credit score and credit report and make a decision based on your joint credit file. 

Can I get a mortgage with a 600 credit score?

Maybe. It depends on which of the credit reference agencies (CRAs) are being used, as well as the mortgage lender. 

If you have a credit score between 561 and 720 with Experian (the UK’s largest credit reference agency), this is considered a poorer credit score than normal. With this Experian credit score you can get mortgages. But, you will likely have to pay high interest rates.

What credit score do mortgage lenders use?

As explained above, the most commonly used mortgage credit scores are the FICO credit scores that you have with the UK’s main three credit reference agencies: TransUnion, Experian, and Equifax.

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