Having a good credit score comes with a variety of financial benefits, and often means you’ll be eligible for a wider range of loans, credit cards, and mortgages, as well as more competitive interest rates. It can also determine what kind of insurance premiums you’re entitled to, and even support you in landing a new job1.

Credit scores are an easy way for lenders to see how reliable you are from a financial perspective. Your credit score could be the difference between a lender accepting or declining a mortgage application, so it’s important that you stay on top of yours.

How is a credit score calculated?

Understanding the impact your credit score has on buying a house is important, but it’s just as vital to know what a good credit score actually looks like.

A credit score can range from 300-850 and is calculated using information from your individual credit report. Generally speaking, there are three things that can influence a good credit score, all of which relate to how you’ve managed your finances in the past. These are:

  • Your payment history
  • How much debt you have
  • The length of your credit history

Each credit referencing company will likely use a different numerical scale, but the following scores tend to reflect how good or bad your credit rating is:

  • 300-579 is poor

  • 580-669 is fair

  • 670-739 is good

  • 740-799 is very good 

  • 800+ is excellent. 

How do I check my credit score?

Checking your credit score is usually free and only takes a matter of minutes. Credit reference agencies like Experian, Equifax and Callcredit can provide you with a basic credit check, but you may also be able to find out your credit score through your bank.2 It’s worth noting that certain services - including credit score monitoring - could incur a fee.

How often should I check my credit score?

It’s worth checking your credit score once a year as a minimum, but you should always check before applying for a mortgage or when attempting to secure any kind of credit. Carrying out a credit check yourself is often referred to as a ‘soft search’, which isn’t visible to lenders and won’t affect your overall rating.

Things that impact your credit score

It’s important to be responsible with your finances if you want to have a good credit score and take out loans or mortgages in the future. Bear in mind that it may take time to build on your credit score. It also takes time for your credit score to be updated, as it’s not a daily record. With that in mind, the sooner you start, the better. 

Here are some ways you can improve your credit score: 

  • Pay your bills on time – late or missed payments will negatively impact your credit score

  • Pay your debts – always pay off any debts as quickly as possible

  • Keep your credit balance low – the closer you are to your credit card limit, the greater the chances of it damaging your credit score

  • Check your credit report - by checking your report regularly, you can make sure that your personal information is correct. Certain credit referencing agencies release credit reports, each of which have different criteria and timeframes as to how often you can access them.3

Check out our article on how to improve your credit score for more information.

Your credit score matters

Your credit score is extremely important when it comes to applying for any credit, loans or mortgages. It essentially tells a lender how reliable you are and how likely you are to pay the money back. 

For instance, if you have what is considered to be a good credit score, potential lenders will have confidence that you’ll be able to pay it back, and are therefore more likely to accept your credit request. However, if you have what is deemed to be a low credit score, lenders will be more cautious and you could find your application is declined. While getting a mortgage with a low credit score is possible, it’s best practice to look for ways to improve it wherever you can.

Expert mortgage advice

Get in touch with us if you have any questions about how your credit score impacts your mortgage. If you have made significant improvements to your credit score and are looking to remortgage, we may be able to help you find a deal that better suits your circumstances.

If you're buying a home for the first time, be sure to keep your credit score as good as you can, and contact us when you feel ready to venture into the world of homeownership.

References and resources:

1 Experian

2 Experian, 2023

32 Which.co.uk, 2023

Important information

Your home may be repossessed if you do not keep up repayments on your mortgage.

There may be a fee for mortgage advice. The actual amount you pay will depend on your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.

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