What credit score do you need to buy a house?<\/h3>
There’s no magic number, but all credit scores sit within a range, such as “excellent” or “fair”. We’ve shown these ranges below. You’re much more likely to be approved for a mortgage if you have a credit score that is “good” or “excellent”. If your credit rating is “fair”, you should also be eligible for a mortgage provided the rest of your application is up to scratch.<\/p>
However, if you have a “poor” or “very poor” credit score, you may find it difficult to get approved by a mortgage lender or will only be offered a loan with an extremely high interest rate and unfavourable terms.<\/p>
Of course, your credit score is only one of the factors considered by lenders and even a perfect credit score can’t guarantee that you’ll be approved for a mortgage. If you don’t have a large enough deposit or are asking to borrow too large an amount, you’re unlikely to be approved regardless of your credit score.<\/p>
The wider lending climate can also impact your chances of getting a loan. For example, lenders may be less likely to approve large mortgages during times of economic uncertainty, even if your credit score and overall application would likely be approved in more stable times.<\/p> There’s no such thing as a universal credit score and each credit reference agency uses its own rating system to determine your credit score. There are three major credit rating agencies used by lenders in the UK: Equifax, Experian and TransUnion. What is considered a good score with one agency won’t necessarily be the same with another (to make life more interesting).<\/p> Depending on your score, you’ll be classified as having excellent, very good, good, fair, poor or very poor credit:<\/p> Your credit score is among the more important factors a lender considers before deciding whether to approve you for a mortgage, but it’s not the only factor. They’ll also consider the following when assessing your application:<\/p> Beyond helping to determine whether you’ll be able to get a mortgage, your credit score also plays a large role in the interest rate and payment terms you’ll ultimately be approved for. If your credit score is below average, lenders may factor in risk-based pricing when quoting your mortgage, when means you could end up paying more.<\/p> To offset the perceived risk of taking on a borrower with a low credit score, a lender may also increase the interest rate on a mortgage. For example, if you have an Experian credit score of 750, you might get a higher interest rate than someone with a credit score of 900, which could cost you tens of thousands more over the life of your mortgage.<\/p>How do you know what rating your credit score has?<\/h4>
Agency<\/th> Score<\/th> Rating<\/th><\/tr><\/thead> Experian<\/th> 0\u2013560
561\u2013720
721\u2013880
881\u2013960
961\u2013999<\/td>Very poor
Poor
Fair
Good
Excellent<\/td><\/tr>Equifax<\/th> 0\u2013438
439\u2013530
531\u2013670
671\u2013810
811\u20131,000<\/td>Poor
Fair
Good
Very good
Excellent<\/td><\/tr>TransUnion (formerly Callcredit)<\/th> 0\u2013550
551\u2013565
566\u2013603
604\u2013627
628\u2013710<\/td>1: Very poor
2: Poor
3: Fair
4: Good
5: Excellent<\/td><\/tr><\/tbody><\/table><\/div><\/article>How your credit rating affects your mortgage rate<\/h3>
What’s the lowest score you can have without affecting your eligibility for a mortgage?<\/h3>