Many people say that buying a house is one of the most stressful things you can do. But working out what you can afford, building up a deposit and finding your dream home are just the start.


To get a good mortgage deal, you’ll need to prove to lenders that you’re a responsible borrower. But what credit score do you need for a mortgage?

What is the minimum credit score needed for a mortgage?

The good news is that in the UK there is no ‘exact’ minimum score you need in order to get a mortgage, as the score you need will vary depending on the lender.


However, it goes without saying that the better your score, the higher your chances of getting a good mortgage.


Each lender has a different definition of what is considered a ‘poor’, ‘fair’ or ‘excellent’ credit score. You can check your credit scores against this chart to get an idea of how you’re doing.

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If you need help checking your credit score with any of the credit reference agencies, check out this blog on how to find your credit report.


While we all aspire to be excellent, in reality that’s not as easy as you might think — and it isn’t always our fault.


Many young people who have never held credit agreements may find that their score is low owing to not yet having built up a credit history. With no credit history to show evidence that you’re a good borrower, lenders are unable to gauge your creditworthiness reliably.


Others may find they encounter a few setbacks as a result of mistakes they made years ago (like missing a phone contract payment).

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Can I get a mortgage with a poor credit score?

If you’re struggling with your credit score, or have little to no credit history, don’t panic. Here are a couple of things you can try to maximise your chances of getting a mortgage:


Firstly, there are some lenders who will help people with hard-to-place mortgages.


If that doesn’t work out, you could also try and find something known as a bad credit mortgage. However, it’s important to note that these mortgages are often viewed as quite high risk. As a result, the interest rate for these mortgages are usually much higher than a standard mortgage.


The best thing you can do to increase your chances of success is to try and improve your credit score ahead of your mortgage application. But, this is not something that can be done quickly. It will take several months at least, and for some it can take years. But it is worth it for the better mortgage rates!

Important to know:

If you’re ever declined for credit (including for a mortgage), it’s important to not rush to apply again too soon.


These kinds of applications leave a ‘hard check’ on your credit file.And too many hard checks in quick succession can look undesirable to lenders. So if you can, take a six month break to recoup and build your credit history.

Lifetime ISAs

One more thing to remember is that the Lifetime ISA (Individual Savings Account) is available to anyone in the UK from the ages 18-40, and can be very helpful when saving for your first home. You can put up to £4,000 into your Lifetime ISA each year, and the government will add 25% to whatever you put in — up to a maximum of £1,000. That’s free money! Head to the government website to learn more.

Does a ‘Mortgage in Principle’ affect my credit score?

A ‘Mortgage in Principle’ (sometimes called an ‘Agreement in Principle’ or a ‘Decision in Principle’) is an indication from lenders that they can lend you an amount of money before you purchase a property.


It’s a level up from the mortgage calculators that you may find on a bank’s website as it’s more tailored to you. They’re usually valid for a few months (but always check the T&Cs) and you are able to have multiple MIP’s with different lenders.

They have two helpful benefits:


1. It gives you a good indicator of what mortgage you can afford

You’ll get a good idea of how much you can borrow, but it’s important to remember that it’s only in principle and doesn’t necessarily guarantee you’d be accepted just yet (the lender reserves the right to change their T&Cs before everything is formally signed).

2. You can use a ‘Mortgage in Principle’ to show estate agents and sellers that you can afford to purchase the property

This is especially useful if the housing market is competitive and the seller has to choose from different potential buyers.


A ‘Mortgage in Principle’ probably won’t affect your credit score, as most lenders will only do a soft credit check to give you the results.


However, when you formally apply for the mortgage, the lender will then do a hard check on your credit report, which will impact your score.
It’s important to check what type of credit check lenders will do before applying for anything. To learn more, check out this blog on the different types of credit checks.

How can I Improve my credit score ahead of a mortgage application?

Improving your credit score ahead of a mortgage application can improve your likelihood of success. But be warned, this is not something that can be done quickly. Here are a few things you can do:

1. Register to vote

Getting on the electoral roll is absolutely essential if you want lenders to approve your application for credit. If you’re eligible to vote, then register here. If you’re already on the electoral roll, then be sure to check that this is shown in your credit report.

If it doesn’t show on your report, then you’ll need to get in touch with the relevant credit reference agency to correct it.

2. Maintain a healthy credit utilisation rate

When they assess you, lenders will look at how much of your available credit across all accounts you’re currently using. According to ClearScore, ‘keeping it under 30% (or even better under 20%) is typically a good strategy.’


If you use between 50% – 75% of your credit limit, it will show up as an ‘amber flag’ on your credit report, meaning it may have an effect on your credit score.’ You can find out more about credit utilisation rates here.

3. Demonstrate you can handle credit

If you have no credit history, lenders will probably view this as high risk and will be less likely to agree to lend to you. This is what is known as being ‘thin file’ or ‘no file’ in the industry.


To change this, you can build your credit history by taking credit. Credit-building credit cards can be useful tools in doing this, though it’s very important to know what you’re doing with them.


You can also try Loqbox Save, which makes it easy to grow your credit score. Find out more about how Loqbox Save can help here.

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