7 things to check on your credit report before applying for a mortgage


The property market might be affected by the impact of Covid-19 at the moment, but some things remain the same. If you’re hoping to buy a home, a lender will use your credit report when assessing your application. Before applying for a mortgage, checking your credit report is something you should do too.

Looking through your credit report can give you a chance to rectify red flags that may appear and could lead to your mortgage application getting rejected. In some cases, negative marks on your report are easy to change, others can be harder. They don’t mean your application will automatically be rejected but that you may need to approach a specialist lender rather than high street banks.

As you check your credit report, here are seven things to keep an eye out for.

1. Personal information is correct

If your personal information is wrong, it can act as a warning sign for lenders. However, these issues are usually down to mistakes and easy to rectify.

Make sure your name, address and previous addresses are correct, as well as the details for the accounts in your name. If there is a mistake, contact the credit report provider and have documents on hand to prove where mistakes have occurred.

2. The people you’re connected to

It’s not just your own financial decisions that can affect your credit report. If you’re connected to someone financially, debt or defaults they have could affect you and the chance of securing a competitive mortgage. A connected person is typically someone you’re in a relationship with and share accounts or financial commitments.

However, previous relationships may also still be linked to your account, even if a joint bank account has been shut down. As a result, an ex-partner could have an impact on whether your mortgage is approved without you realising. Make sure you check who your credit report is linked to before seeking a mortgage.

3. That you’re on the electoral roll

One of the easiest ways to boost your credit score is to register on the electoral roll if you haven’t already. If you’ve moved recently or simply forgotten to register, it’s a step that can improve your credit report and make you seem more favourable to lenders. It allows lenders to verify who you are and where you’re living, meaning you’re viewed as a less risky borrower. This is because it helps rule out the possibility of fraud and can show you’re stable where you live, a positive in the eyes of a mortgage provider.

4. Accounts in your name

Your credit report keeps track of the accounts in your name, this includes bank accounts and credit cards, for example. In some cases, you may find you have some on your credit report that you don’t use anymore but have never gotten around to closing. Having many accounts in your name can have a detrimental effect on your credit score.

If you have accounts that you don’t use, it can be wise to close them. However, keep in mind that accounts you’ve had in your name for a long time can be seen as a positive too, as they show stability. Review the account you don’t use and weigh up which are worth closing.

5. Credit card utilisation

How much of your available credit do you use? Be sure to check the amount of credit you’re using. While credit cards can be incredibly useful, maxing them out can indicate to potential lenders that you may find yourself in a position where you can’t repay the debt. Ideally, you should try to keep credit utilisation under 30%.

If you’re in a position to do so, paying down debt can improve your chances of securing a mortgage. Keep in mind, that it can take several months for repayments to show up on your credit report, so this should be a step you take early on if possible.

6. Recent searches

If you’ve recently applied for credit, from credit cards to loans, a lender is likely to have performed a hard credit search. This will show up on your credit report to other lenders. While a mortgage lender won’t be able to see the outcome of the credit application, multiple searches close together can act as a red flag. This is because it can indicate you’ve quickly increased debt levels or that you’ve been rejected by other lenders.

This is also the reason it’s important not to make multiple mortgage applications in quick succession if your initial one is rejected. Take the time to understand a lender’s criteria and the likelihood of them accepting your application before applying to improve the chances of success. If your mortgage application is rejected, ask why this happened and find a lender that meets your need.

With so many different lenders available to choose from, this can be time-consuming and complex. A mortgage broker can help you approach those lenders likely to approve your application. If you’d like help with this, please get in touch.

7. Defaults

A default on your credit report, where a bill or payment has been missed, can act as an instant red flag to potential lenders. However, if you do have defaults in your report, it doesn’t mean your dreams of homeownership are out of reach.

Being aware of defaults may mean you’re able to add a note to your credit report, explaining the situation, and allows you to choose lenders who specialise in working with people who have defaulted on payments in the past.

If you would like help applying for a mortgage, whether it’s for your first home or as you move up the property ladder, please contact us.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

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