Your credit score is one of the first things many lenders look at during a mortgage application. A strong score can improve your approval chances and help you access a better deal. However, it is only one part of the process.
At Jones & Young, we regularly speak with first time buyers, contractors and self employed applicants who are worried about their credit history. Many assume they need a perfect score to get a mortgage, but that is not always the case. Mortgage lenders also consider your monthly income, employment history, deposit size and wider financial situation.
In this guide, we explain what credit score you need for a mortgage, how lenders assess applications and what steps may help improve your credit score before applying.
What Is a Credit Score and Why Does It Matter for a Mortgage?
A credit score is a number linked to your credit history. It gives lenders an overview of how you have managed borrowing in the past. Mortgage lenders use this information to help assess lender’s risk during a mortgage application.
Your credit score is usually built using information from your credit report and credit file. This may include:
payment history
credit card balances
missed payments
late payments
outstanding debts
available credit
previous credit applications
Credit reference agencies such as Experian, Equifax and TransUnion all calculate credit scores slightly differently. Because of this, your score may vary between providers.
While your credit score plays an important role, lenders assess more than just a number. Many lenders also review other factors including your stable income, monthly repayments, financial history and loan to value ratio.
In general, the higher your score, the lower risk you may appear to mortgage lenders. A good credit score can improve your chances of mortgage approval and may help you access lower interest rate options. A low credit score does not automatically mean you cannot get a mortgage, but it may reduce the number of mortgage products available.
What Credit Score Do I Need for a Mortgage?
There is no single minimum credit score needed for a mortgage. Different lenders use different criteria and many lenders look at your full credit profile rather than one specific credit score.
That said, credit reference agencies usually group scores into ranges. Using Experian’s system as an example:
961-999: Excellent
881-960: Good
721-880: Fair
561-720: Poor
0-560: Very Poor
Excellent credit scores may help you access more competitive mortgage rates and a better deal overall. A fair credit score or poor credit score may still allow you to get a mortgage, although you could face higher interest rates or need a larger deposit.
Some mortgage lenders specialise in helping people with bad credit or previous credit issues. Others may have stricter lending rules. This is why being declined by one lender does not always mean other lenders will say no.
Most lenders will also look at:
your monthly income
employment history
outstanding debts
how much deposit you have
recent credit applications
your overall financial situation
Even with a low credit score, strong affordability and a larger deposit can sometimes improve approval chances.
How Mortgage Lenders Assess Your Mortgage Application?
Your credit score is important, but it is only one part of a mortgage application. Lenders assess several key factors before making a decision.
Most lenders want to understand whether your monthly repayments will remain affordable both now and if interest rates rise in the future. They will usually review:
monthly income
employment history
outstanding debts
credit card balances
existing financial commitments
loan to value ratio
available credit
payment history
For self employed applicants, lenders may also review tax returns, company accounts or contractor income documents. Some lenders assess limited company directors differently from sole traders, which is why mortgage advice can be useful in more complex situations.
A larger deposit can sometimes offset a low credit score because it reduces the lender’s risk. This may improve access to mortgage products and more competitive interest rate options.
First time buyers are often surprised that affordability checks can carry just as much weight as their credit rating. Even applicants with a good credit score may struggle if they have high monthly commitments or recent credit issues.
Can You Get a Mortgage With a Low Credit Score or Bad Credit?
Yes, it is possible to get a mortgage with a low credit score or bad credit, although your options may be more limited.
Some high street lenders have stricter rules around missed payments, late payments and previous bad credit score issues. However, other lenders specialise in helping borrowers with more complicated financial history.
If you have a poor credit score, lenders may ask for:
a larger deposit
evidence of stable income
lower levels of existing debt
proof that previous credit issues are now resolved
A low credit score can sometimes lead to higher interest rates because lenders may view the application as a higher risk. Even so, many lenders are still willing to consider applications on a case-by-case basis.
Your approval chances may improve if your recent credit history shows responsible borrowing behaviour. For example, keeping up with payments, reducing outstanding debts and limiting new credit applications can all help strengthen your credit profile over time.
How To Improve Your Credit Score Before a Mortgage Application?
If you are planning to apply for a mortgage, taking steps to improve your credit score beforehand may help you access more mortgage deals and improve approval chances.
Check Your Credit Report Regularly
Review your credit report with the main credit reference agencies to check for errors or outdated information. Small mistakes on your credit file can sometimes affect your score for a mortgage.
Make Payments on Time
Late payments and missed payments can stay on your credit history for several years. Paying bills on time is one of the simplest ways to improve your credit score.
Reduce Credit Card Balances and Credit Usage
Try to keep balances low compared to your credit limits. High borrowing levels may increase lender’s risk in the eyes of mortgage lenders.
Avoid Too Many Credit Applications
Applying for several forms of credit within a short period may affect your score. If possible, avoid taking out a new credit product shortly before a mortgage application.
Join the Electoral Roll
Being registered on the electoral roll helps lenders confirm your address and identity. This can support your overall credit profile.
Build a Positive Credit History
If you have little borrowing history, using a credit product responsibly and making repayments on time may help build a stronger credit history over time.
Common Credit Score Myths Explained
There are plenty of misconceptions around credit scores and mortgages. Here are some of the most common.
“I Need a Perfect Credit Score to Get a Mortgage”
You do not need an excellent score to get a mortgage. While excellent credit scores may improve access to lower interest rates, many lenders still consider applicants with a fair credit score or previous bad credit issues.
“Checking My Credit Report Hurts My Score”
Checking your own credit report does not lower your score. This is known as a soft search and is only visible to you. Regularly reviewing your credit file can actually help you spot mistakes or signs of fraud earlier.
“All Lenders Use the Same Credit Criteria”
Different lenders use different criteria when assessing a mortgage application. Some lenders place more focus on payment history, while others may look more closely at stable income, deposit size or overall financial situation.
Gross vs Net Income: What Do Lenders Prefer?
Lenders assess income differently depending on how you are employed. For employed and contractor applicants, most lenders usually focus on gross annual salary.
For self employed applicants, the process can be more detailed. Sole traders are often assessed using net profits shown on tax returns. Limited company directors may be assessed using salary and dividends, while some lenders may also consider company profits.
Contractors can sometimes be assessed differently again, with certain mortgage lenders using a day rate calculation instead of traditional income figures.
Because different lenders have different criteria, speaking with a mortgage broker can help identify lenders suited to your financial situation.
Jones & Young: Mortgage Support for Self-Employed Applicants
At Jones & Young, we help self employed applicants, contractors and first time buyers across the UK navigate the mortgage process with confidence.
Whether you have a low credit score, previous bad credit or a more complex income structure, our team can help identify lenders that may suit your circumstances. We work with a wide range of mortgage products and understand that every mortgage application is different.
If you are unsure where you stand or want to improve your approval chances before applying, our team is here to help.
FAQs
Below are some of the most common questions people ask about credit scores and mortgages.
What is the minimum credit score needed for a mortgage?
There is no universal minimum credit score for a mortgage because every lender uses different criteria. Some mortgage lenders are willing to consider applicants with a low credit score, while others may have stricter requirements. Your deposit size, income and overall financial situation can also influence the outcome.
Can I get a mortgage with bad credit?
Yes, it is still possible to get a mortgage with bad credit. Some lenders specialise in helping applicants with previous credit issues, missed payments or a poor credit score. You may need a larger deposit and could face higher interest rates depending on your credit profile.
Do mortgage lenders check all credit reference agencies?
Not always. Mortgage lenders may use one or more credit reference agencies when reviewing your credit report and credit history. Because each agency calculates scores differently, your credit score may vary slightly across providers.
Will missed payments stop me getting a mortgage?
Missed payments can affect your approval chances, but they do not automatically mean you will be declined. Lenders assess how recent the missed payments were, how often they happened and whether your financial situation has improved since then.
Does a larger deposit improve mortgage approval chances?
In many cases, yes. A larger deposit lowers the loan to value ratio, which can reduce lender’s risk. This may improve your chances of mortgage approval and could also help you access better mortgage rates.
