Credit Scores and Credit Searches

Understanding your credit score to get the right mortgage for you

What is a Credit Score, Credit Search or Credit Reference?

A credit score is a numerical value attached to you by a credit agency to determine your creditworthiness for lenders and providers looking to loan you money.

There are currently 4 main credit reference agencies who gather and hold your all your financial transaction information.

Companies looking to offer you credit can access this information and use it make a judgement about suitability to lend to you.  

The agencies are Equifax, Experian, Transunion and Crediva.

You have the highest score; this shows you have credit or loans and conduct them well.

Your friend may be having loan payment issues, may have little or no credit, may not be traceable, or a combination of these.

He or She will probably have more difficulties getting a mortgage and they would be advised to order a full report so they can show an adviser what has happened.

No, they do not.

They supply the information to the lenders who will then use their own criteria to decide whether they wish to help or not.

No, the answer remains the same as above. They are just data providers.

Yes, you must as soon as possible.

The agency will show you how to do this on its T&Cs.

No, data stays on your profile for 6 years.

The bigger lenders tend to credit score, whereas some smaller lenders credit search and look to interpret the score rather than just accepting it.

This means they check what credit you have but make a human judgement as to whether to lend or not.

The best answer is yes, it is advisable to.

Let’s say for example you had a default from a mobile phone provider, and had no other form of credit, your score will be lower than if you had satisfied the default and had a well conducted credit card.

We recommend first time buyers to have a credit card, use it sparingly and repay the balance in full each month.

You need to ensure that your bank has an updated address straight away when you move.

You should always sign onto the electoral roll when you move to a new address.

Lenders hate not being able to locate prospective borrowers.

To have a top score is a great start but your requirements and amount of borrowing required must match the lenders criteria and affordability calculations.

Quite simply; keep addresses up to date, sign on to the electoral role, have as smaller number of paid-in-full credit cards and loans as you can.

Don’t miss or make late payments.

Only if they “share” or are associated with some credit you have.

No, not necessarily.

Some lenders specialize in helping people who have had or have financial difficulties.

The rates will be higher than mainstream mortgages and you will typically need help from an adviser to see if an application can be passed.

Always have a copy of your latest full report for the adviser.

Some mainstream lenders will help borrowers if they have small debt problems against their name.

It is important to download your credit file and talk to a registered mortgage adviser about the problem. Help may be possible.

No, this is not correct.

It is a good idea to regularly check your credit score, particularly in this age of account hacking and other internet scams.

Many lenders used to leave a trail that they had searched your file.

The more this was done the more likely your score would diminish as lenders were suspicious why search after search was occurring.

Many mortgage lenders now operate a system where their search is invisible which is much fairer for the customer.

Yes, we can point you in the right direction.

Different lenders use different credit agencies, so we’ve teamed up with Checkmyfile who will provide a report that covers these different credit agencies.

You can sign up to get your credit report document from them here: Get My Credit Report.

Please be aware, they offer a 30-day free trial* and then the service comes at a monthly cost. So, if you don’t want to use the ongoing service, please be sure to cancel your account with them once you’ve downloaded the credit report for us otherwise you will be charged by them on an ongoing basis.

For full disclosure, we’ll also receive £12 when you do so as a thank you from Checkmyfile for recommending their service.

*Accurate as of publication date 27th April 2020.  

Mark made the whole process of buying my first property so much easier than it could have been. His help and continued support was invaluable. I have already recommended him to several friends and colleagues.

Polly H - Gloucestershire