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7 important things you should check on your credit report before you apply for a mortgage

January 22, 2025

Category: Mortgages

Mortgage lenders will look at your credit report when you apply. However, by reviewing your report first, you could identify red flags and improve your chances of securing a mortgage.

You can view your credit report for free and it won’t affect your credit score. In the UK, there are three main credit report providers – Equifax, Experian, and TransUnion. They all use different ways to calculate your score, so it’s worth giving each one a quick review.

Why your credit score and report matters

Lenders will look at your credit report to assess how much risk you pose. It can affect whether they approve your application and the interest rate you’re offered.

Whether you’re a first-time buyer, moving home, or you are remortgaging, you should make checking your credit report a priority – it could save you money and make the application process smoother.

Here are seven things to check on your credit report.

  1. Personal details

Make sure your personal details, including old addresses, are correct and free from typos. Checking this now means the details on your credit report will match those on your mortgage application. Be aware that mistakes could lead to delays.

  1. Personal connections

If you’ve ever opened a joint account or taken out a financial product, such as a mortgage, with someone else, they may show up on your credit report as a financial connection. It’s important to check this as the financial decisions of an ex-partner or other connections could influence your credit score.

  1. Electoral roll

If you’re not already registered to vote, doing so is one of the simplest things you can do to boost your credit score. Your credit report will show lenders if you’re on the electoral roll. It’s viewed as a positive factor by lenders as it shows stability.

  1. Current accounts

Your credit report will give a snapshot of your current accounts. It doesn’t show lenders your income or what you’re spending your money on. However, it does show if you’re using your overdraft. If you can, clearing your overdraft a few months before you apply could help you secure a mortgage.

In addition to whether you’re using your overdraft, lenders may also look at how long you’ve had your current accounts. If you have accounts you’ve used for years, it could demonstrate stability.

  1. Payment history

Your payment history is crucial data for mortgage providers. It shows if you’ve missed payments for utility bills, loans, and other forms of borrowing. A history of missed payments could mean you’re viewed as a greater risk and that your mortgage application isn’t approved or that the interest rate you’re offered is higher.

Usually, this information is retained for six years. If you have missed payments in the past and they will be removed from your report soon, it could make sense to wait a little longer to apply for a mortgage.

  1. Credit utilisation

While lenders are keen to see your repayment history, they also look at how much of your available credit you’re using. For example, are you near your credit card limit or using a relatively small proportion?

A low utilisation suggests to lenders that you have a good handle on your finances and aren’t making purchases that are beyond your budget. If your credit utilisation is high, focusing on making overpayments before you apply for a mortgage could be useful.

  1. Previous hard searches

When you apply for credit, from loans to credit cards, the lender will typically carry out a hard credit search. These show up on your credit report for 12 months.

Lenders can’t see if your application was approved. However, if you have several hard searches on your report, they may see this as a sign that you’ve quickly increased your financial commitments or are struggling to manage your budget. As a result, it’s best to avoid applying for credit when you’re getting ready to take out a mortgage.

Get your paperwork in order too

As well as your credit report, it’s a good idea to get your paperwork in order. A lender may ask to view documents when deciding whether to approve your application.

A lender may ask to view:

  • Payslips to prove income
  • Tax returns and contracts if you’re self-employed
  • Bank account statements to review your spending habits.

Going through your credit report and getting the correct paperwork together now can make the process much smoother and less stressful.

Are you ready to apply for a mortgage?

A poor credit score doesn’t always mean you can’t take out a mortgage, but you may need to approach specialist lenders and the cost of borrowing could be higher. If you have questions about your options or want support throughout the process, we’re here to help.

If you’re ready to apply for a mortgage, get in touch with us.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.

 

 

 

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