After the 2008 mortgage bubble and crash, mortgage companies have been under a greater duty to make sure that borrowers are able to pay their monthly payments even if mortgage rates increased significantly. This means that more detailed enquiries will be made to confirm your household income, expenditure and the reliability of your cashflow.
In addition to stress testing the borrower’s finances, the lender will undertake ‘credit checks’ to establish a borrower’s credit history including any evidence of bad debts or loan defaults. Credit checks are now quite sophisticated. Your age, employment details, where you live, who you bank with and for how long, whether you borrow money elsewhere and if you pay it back as agreed; all of these things are considered in an effort to ‘profile’ your likely risk and your profitability to the lender. For example, if you are not registered to vote or you have never borrowed any money or entered any contract for a utility, this will affect your credit rating.
Knowing your budget and living within it is good practice for all of us, but if you have a phone contract, a credit card and a broadband bill and you pay them regularly, on time, this will all help to improve your credit profile. Make sure you don’t apply for credit you don’t use as every application is noted and if you don’t take up credit (or it is refused) a lender may draw conclusions that are harmful to your score. Obviously, judgements against you in court (only for credit related matters or fraud) are likely to be detrimental to your score, although criminal records cannot be searched by lenders, They can, of course, ask you and you must not lie.
Many UK lenders use one of the main credit agencies such as Experian, Equifax or Call Credit, with Experian being the most widely used for mortgage applications. These agencies collate a picture of your past credit history to better predict your future behaviour.
Related Blog articles:
For more information or to speak to a mortgage adviser contact us on 01628 507477.
Download our Free First Time Buyers Guide
Recent posts
Buying a house is a big deal, and where you are planning to buy will make a difference financially. In this short blog, we look at the most affordable and most expensive areas and how much you need to be earning to buy in there.
Pros and Cons of Equity Release
8 days ago
Equity release is a type of mortgage that allows homeowners 55 and over to access money from their property's equity without having to leave their home. This is done by securing a loan against the house which is usually repaid by selling the property when the borrower passes away or has to move into long-term care.
Your House Viewing Checklist
9 days ago
It’s important to ask questions about the property you are interested in before taking that step to make an offer. A little probing can make all the difference between buying your dream house or something that requires a lot of work.
Half of over 60s predicted to benefit from accessing housing wealth through Equity Release
12 days ago
There are millions of homeowners over the age of 60 who are likely to release money from their homes to pay for their lifestyle during retirement giving those who are 'asset rich but cash poor' a way to live out their retirement the way they wish.
Average Age of the First Time Buyer in the UK
19 days ago
The average age of a first-time buyer in the UK is two years older than 10 years ago. This is understandable with managing the cost-of-living and challenges within the economy such as high interest rates making it difficult to get onto the property ladder.
Delayed Start Mortgage from Skipton
21 days ago
Skipton Building Society launches ‘Delayed Start’ mortgage meaning first time buyers won’t be required to make repayments for the first three months.
According to a survey by Skipton, first time buyers who bought their home in the last five years found that in the first three months of living there, they were spending upwards of £30,000.
Gardening Tips for Beginners
26 days ago
If you have recently moved into a property with a garden that requires a little TLC, or you’d like to get on top of your current green space, check out our tips.
The Family-Backed Mortgage from NatWest
29 Apr 2025
High street lender, NatWest, have launched a new product to help first-time buyers purchase a property with assistance from a family member or friend to get them on the property ladder sooner.
More information
Trusted by
