Credit Check Mortgages

A credit check is the same as a credit search. This is where a company accesses your credit report to see information about you and gauge your creditworthiness. A credit check should only take place with your consent and there should be a good reason for them to look at your credit profile. Commonly credit checks are needed when:

• Applying for a loan, mortgage or insurance contract.
• Opening a bank account.
• New mobile phone contract.
• Potentially your employer may require one.
• Utility providers such as Gas, electricity, and water.

Based on the information within your credit check the provider who you are seeking a product from will decide if you qualify for their service/product.

If you are looking to take out a mortgage with a high street bank or building society you will need to have a good credit profile, however, if you have bad credit registered against you such as missed payments, defaults or county court judgements you will need a bad credit mortgage which is provided by specialist lenders accessible through mortgage brokers, such as The Money Hub.

Your credit report shows data over the last 6 years. The main information held within a credit check is:

• Credit – It will show a record of all the credit you have taken out within the last 6 years (mortgages, loans, utilities, mobile phone contract etc).
• Payment – It will show your payment history on the credit that you have had. Any missed payments will show and also how many months you are/were in arrears.
• County Court Judgements (CCJ) – If you have been taken to court over an unpaid debt this will show unless you settle the debt within one month of it being registered against you in which case you can request for it to be removed.
• Voters Roll – It will show where you live currently and in the past.
• Financially Linked Persons – If you are financially linked to another person, partner perhaps, as you have taken out a joint financial commitment it will mention the person’s name to whom you are linked financially to.
• Past Credit Searches – When you have applied for credit in the past it may have left a ‘footprint’ on your credit file. By keeping an eye on your credit report you can make sure no credit checks have been done without your consent.

A soft credit check, also known as a ‘soft search’ is a view of selected information on your credit report and these are used so a lender can make a quick decision to whether you would qualify for a mortgage. Most lenders initially do a soft credit check. This ‘soft search’ won’t have any impact on your credit score and other lenders cannot see a record of this search. If you run your own report you will be able to see this soft credit check.

A hard credit check is when lenders, such as mortgage lenders, want to see your full credit report. This generally happens when you submit a full mortgage application. When a hard credit check is done this will show on your credit report for you and other lenders to see.

The two main credit agencies are Experian and Equifax. By visiting there website you can request to see your credit profile which will show all the data they hold on you – this is what a lender will see when they carry out a credit check on you. It is good practice to regularly review your credit profile and make sure all the information contained in the report is correct. Sometimes there maybe errors and this could cause issues when you are looking to borrow money in the future. By you looking at your own credit report this will not affect your credit score or your chances of you being accepted for credit.

Your credit score is a number generated by the credit agencies to determine your credit worthiness. Your credit score is based upon a number of factors such as your payment history, debt levels and voters roll data.

As a guide the credit score ranges are:

If you are looking for mortgage advice, the mortgage advisers at The Money Hub, would be happy to help you. We can discuss what lenders are offering and what mortgages are available based upon your credit report. Please complete the above enquiry form or call the office.