What credit score do I need for a Mortgage in 2022

After 8 years as a Mortgage Broker this is a question that consistently comes up year after year.

We have a very simple phrase… Ignore the score.

Credit agencies seem to think it is important to update you on your credit score each month. It has no relevance in the mortgage world. There are 3 main credit agencies, Equifax, Experian and Transunion – all of these have their own ways of scoring your application. In short, you have 3 different credit scores depending on which of these agencies you are looking at.

Why should I ignore my credit score?

Apart from the above, we also suggest ignoring the score as Mortgage lenders do not use it. Most of the high street lenders do score your application, but they score it using their own algorithm.

Typically this means they will take all of the information from your credit report, they will take all of the information from your application, they will combine the 2 and score it accordingly where you will either pass or fail. An excellent or terrible score is at best an indication of whether or not you will be accepted, but it is by no means a guarantee.

Non credit scoring Mortgage lenders

We then have lenders who do not use any type of scoring methods. These lenders could be some of the specialist lenders or small to medium sized Building Societies.

These lenders are either criteria driven – ie Do you fit criteria and affordability? If you do, they are inclined to accept your application. Or there are other lenders where criteria is flexible and they take a more holistic approach when assessing your application, if you imagine when your parents used to go and speak to the bank manager, this is along the lines of how they work.

Having Bad credit does not mean you will not be accepted with these lenders. One example which I tend to refer back to is a couple who entered an IVA, this failed and they then went bankrupt. If you were to just look at that on paper, I am not sure they would have many options.

However with a little more context it can make a big difference. The couple lost a child and they were then misadvised by a Debt Agency who convinced them to enter an IVA which they should never have done. After speaking to our account manager and underwriter we were able to get them a 90% Mortgage with a rate below 3%.

Mortgage Credit score overview

There are many different ways to place a Mortgage. In an ideal world we would all want high street rates but that is not possible. If you are not passing credit checks it is not necessarily the end of the world. We can look at some of the smaller lenders who are criteria driven. This is ideal as it means they can take a personal approach to underwriting your application.

We have plenty of examples where we have been able to help people who have been declined elsewhere. Likewise we have many examples of helping people told they have no chance. This is why we say ignore the score. If you are struggling, get in touch and lets see what we can do.