A Complete Guide to Your Credit Score: What Every Homebuyer Needs to Know
What is a Credit Score?
Your credit score is a representation of your financial history, used by lenders to assess how reliable you are when borrowing money. It plays a crucial role in mortgage applications, determining whether you qualify for a mortgage and what interest rates you’ll receive
Ultimately, a credit report confirms how good your are at borrowing money.
Why Does Your Credit Score Matter?
When applying for a mortgage, lenders use your credit score to decide:
- If you’re eligible for a mortgage
- How much they’re willing to lend you
- What interest rate you’ll receive (higher scores often lead to lower rates)
A good credit score can save you thousands over the lifetime of your mortgage by securing better interest rates.
What is a Good Credit Score?
Different credit reference agencies (CRAs) in the UK use different scoring ranges:
- Experian: 0-999 (Good: 881-960, Excellent: 961-999)
- Equifax: 0-1000 (Good: 531-670, Excellent: 811-1000)
- TransUnion: 0-710 (Good: 604-627, Excellent: 628-710)
Lenders may have their own internal scoring system, but improving your score with these agencies will generally improve your mortgage prospects.
How to Check Your Credit Score for Free
There are three main credit agencies; Experian, Equifax and Transunion.
Checkmyfile enables you to obtain all three of these credit reports in one place. Although this is a paid service, you can take advantage of their 1-month free trial.
How to Improve Your Credit Score
If your credit score needs a boost before applying for a mortgage, here are some key steps:
✔️ Make Payments on Time – Set up direct debits for bills and debts. Missing payments can have a huge impact on your credit worthiness.
✔️ Reduce Credit Utilisation – Keep your credit usage below 75% of your limit where possible, and ideally, under 50%.
✔️ Register on the Electoral Roll – This helps confirm your identity.
✔️ Avoid Multiple Credit Applications – Too many applications in a short period can lower your score.
✔️ Check for Errors – Review your credit report for mistakes and correct them with the relevant CRA.
What If You Have a Low Credit Score?
Having a poor credit score doesn’t mean you can’t get a mortgage, but you may:
- Need a larger deposit
- Face higher interest rates
- Need a specialist mortgage lender (e.g., for those with adverse credit)
At Quanstrom Financial, we are experts at helping clients with all credit backgrounds find the right mortgage solution.
Final Thoughts: Take Control of Your Credit Score
Your credit score is one of the most important factors in securing a mortgage. By understanding and improving it, you increase your chances of getting a better deal.
📞 Need mortgage advice? Call 01323 364432
📧 Email info@quanstromfinancial.co.uk
