Does your credit score effect getting a mortgage

TMC35

I don't know if anyone can help me.

My husband and I are looking to get a mortgage, both FTB's. We have just one loan £3.5k remaining at £104 a month, and we have a credit card each that we use every month and pay off in full.

However our credit scores on check my file are in the 700-800's, mine I believe will increase once I am on the electoral role to over 800, I am on it but the credit agencies are not reporting this so I have written to them all this week with proof, but my husbands has been updated and his score actually went down to 702!

He asked the guy at check my file why his score had gone down and he said it was because we had recently closed credit card accounts, we did this because we had read it helps to close any credit accounts that we are not using to improve your score but the guy said this actually makes it worse

So my question is this, neither of us have anything negative on our credit report in terms of late payments in the last 3 years (my husband has a couple of late payments to Next but they were in 2005/2006) and we have minimal debt. The only negative thing I believe is that we have been at our address for less than a year as we moved in with my parents from our rented house to pay off debts and save deposit. We are looking to apply for with Nationwide with their save to buy account for a 95% deposit and we have our main bank with Nationwide so they can see how well we manage our money and save. Is it the actual 'score' that dictates whether you get the mortgage, or the clean credit history... I am so confused and pretty gutted as some of our friends who regularly late pay things and are in loads of debt seem to have a better score than us!

I am also wondering if paying off my husbands loan will help to boost his score, but from what experian said about closing the credit card accounts I am not so sure, the information I am seeing online is so conflicting.

Thanks in advance.

ACG

I havnt read your whole post as im in a bit of a rush, but yes scores do affect your changes of getting a mortgage...but not the score equifax/experian give you. Banks have their own scoring system - forget the scores on the credit reports just go off what you report actually shows.

If its all green, then you stand a decent enough chance. If there is plenty of red and orange then you may find it more difficult.

TMC35

Thanks for your quick reply.

Yes we are all green! No red or orange for me at all, and none for my husband since 2006.

I am hoping we will be ok... we are not looking to borrow anywhere near as much as the nationwide online calculator says we can borrow, I don't know if this works for us.

I don't know how else we can improve our scores as like I say I have closed unused accounts, paid off nearly all of our debt, so fingers crossed then if the banks don't go by these actual scores and it's the clean credit history we might be ok...

ChopperST

As long as you pass affordability checks and your credit checks show you pay off your debts every month then you should be fine.

Generally lenders will deduct a percentage off your wage for the debts you are servicing for credit cards e.g. 3-5% and will deduct your monthly loan repayments when calculating affordability.

Closing old cards down is good not bad as it reduces your total available borrowing and demonstrates you live within your means and are not credit hungry...

ACG

Based on what you have said i would imagine you will be fine, your not pushing income multiples from what your saying so i wouldnt worry about the score on the credit reports - its worthless.

TMC35

Thanks for your replies.

I don't know why check my file told us that the closing credit cards was negative.... we had read elsewhere that it was a good thing to do and some of our open credit cards we'd not used in years had £8k limits on them so we wanted to get rid of this from our files as we don't want to affect us!

I shall ignore the number on the credit report then and just go with the report itself which is all green

Thrugelmir

TMC35 wrote: »

I don't know why check my file told us that the closing credit cards was negative....

May just have been the view of the individual adviser.

The Credit Rating Agencies supply the lenders with datasets of information detailing activity over the past 6 years. Lenders use these datasets as part of their underwriting process.

You've done all the right things to improve your attractiveness as a potential borrower. Using the NW scheme is a good idea. As this in in itself will improve your rating as well. NW will also give you preference when it comes to a mortgage over non savers.

Goldiegirl

I think people read too much into their credit score.

To the lender it doesn't matter whether you are a 700 or a 999. What matters to the lender is how you score on their own systems and scoring.

As long as you are on the voters roll and never have any arrears defaults or CCJ's that that safe way to make sure you get your mortgage.

TMC35

Thanks everyone for your replies