Mortgage application and Credit scoring

pippin06

So I've looked at my credit report and will be applying for a mortgage. What will they be looking for on the credit report and what sort of thing will lead to a decline?

How damaging is it to have a few mortgage searches on there? Afterall I'm looking for a good deal so isn't it acceptable that I would shop around?

thanks

pippin06

Any thoughts on this?

Tixy

On your credit report they will be looking for evidence of potential financial mismanagement, which would be everything from a record of bankruptcy through CCJs/defaults and even missed payments. As well as any record of fraud (e.g. a CIFAS marker).

They'll also look for evidence of good financial management.

They'll also likely look at your level of debt and credit and whether you debts have been increasing. As well as how much you are repaying a month and what your monthly minimum repayments are.

No one thing would necessarily cause a decline (except probably bankruptcy/IVA) it will be the overall picture that they will assess.

If you have any financial associates on your file (even if you are not applying for a mortgage with them) then its possible that data on your associate's file could also cause issues with being accepted.

Multiple searches can have an impact, for a mortgage this may be slightly less than for other credit products.
2-3 searches is not unreasonable, much more than could raise questions.

pippin06

Thanks that's helpful. How about available credit? I realised I have quite a worrying amount of that because of cards I must have let lapse and not cancelled.

With all lenders having such different criteria it doesn't make sense to mark an applicant down just because they've had a search with another lender who may or may not have offered them a deal. Could be I'll try a few then find a better deal elsewhere so want to try them not that any others have turned me down.