Mortgage lenders use your credit score as a critical factor in determining your eligibility and the terms you'll be offered. They will use it to build a profile in terms of your financial history and responsibility, as well as how you may behave financially in the future. This then informs them as to how much of a risk you are to loan to. 

Let’s take a look at why your credit score is important, and what it means when it comes to getting a mortgage.

Lenders and credit ratings 

Lenders will have different criteria to determine what they class as a good credit score. If your score falls below this threshold, you may find it difficult to get a mortgage, or more preferential terms. However, a good credit score can open doors to additional mortgage options, as well as more competitive interest rates.

Interest rates and credit

Your credit score significantly influences the interest rate you'll receive on your mortgage. Generally, borrowers with higher credit scores are offered lower interest rates, while those with lower scores may face higher rates. Even a seemingly small difference in interest rates can have a substantial impact on your monthly mortgage payments and the overall cost of the loan.

Credit history 

If you have no credit history whatsoever, this can also impact your eligibility for a mortgage. Lenders will have nothing to go on to determine whether you’re a responsible borrower, so you may find it more difficult to get the terms/type of mortgage you want. 

Your credit score is a vital part of your financial profile and a key factor in mortgage applications. To improve your chances of securing a mortgage that’s suitable for your circumstances, it's crucial to maintain a healthy credit score.

Get in touch with our team of advisers today to discuss how we can support you with finding a mortgage that matches your personal circumstances. 

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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