Mortgages & Your Credit File
Everyone should take time to check their credit file. It's one of the most important influences on how lenders view you.
Check Your Credit File
Your credit file contains detailed information about your credit commitments which lenders use when making their decision.
At KG Mortgages we recommend checking your credit report with at least one of the three main credit reference agencies. They all have paid for options but a statutory report is free and it will have all the information you need.
Checkmyfile.com is a simple way to review your Equifax, Experian and TransUnion files in one go.
The buttons below are links to websites where you can access your credit files. These are links to external sites, so we have no control over the content. By clicking on a link, you will be leaving this regulated website. Please check all costs before signing up.
You Are Not A Number
You DON'T have a universal credit rating. Each lender scores you differently. This means, even if one lender has rejected you, other lenders may view you very differently. (Though after a rejection, it's always important to check your credit file before applying again).
For this reason the 'score' you are given by the credit rating agencies is a guide to help you. What the lenders look at is the details behind it.
We work with the lenders and by understanding their criteria, we give you a better chance of success
What to look out for
Once you have your credit file, there are some things you should check. You will see that all the credit that you have had over the last 6 or 7 years is listed, and you will need to go through each one to check they are correct.
First check if there is anything that shouldn’t be there. If there is a loan, credit card or other credit showing which you don’t recognise this could be an error, or it could indicate someone else has your details and is applying for credit in your name. If you find credit on the file that isn’t yours you must contact the credit provider, the credit reference agencies (all 3 of them) and possibly the police (via https://www.actionfraud.police.uk/) as soon as possible. These will need to be removed from your file before you apply for a mortgage.
Then check that your address is correct. The credit report should tell you if you are on the voters roll at your current address which is very important, and that each of the current lenders/providers listed have the correct address for you. If there are any errors, or an old addresses that hasn’t been updated, you will need to contact the providers directly to get this changed.
It is important to check that you will not be seen as over indebted. Lenders will consider the total amount of outstanding credit in relation to your income. They will also consider your total amount of variable credit (e.g. balance on a credit card) verses the credit limit. If you are over 50% of the available credit (on an individual account or overall), this could be a sign that you are reliant on credit so you should aim to keep all accounts under the 50% mark.
You should check if you have any missed payments, defaults, CCJs and other black marks. Any missed payments must have been settled – even the smallest missed payment could have an impact if it is still outstanding. One or two small missed payments that have been settled shouldn’t cause alarm but a large miss payment or multiple smaller missed payments could be seen by lenders as an issue.
You should also check if there are any financially connected people listed. These will typically be a partner that you share an account or mortgage with. When a lender completes a credit check for you, they will also check the file of these connected people even if you are not applying for the mortgage with them. If there is someone listed that you are no longer connected to (e.g. an ex-partner with whom all financial ties have been cut) you should contact all 3 credit reference agencies to inform them you are no longer associated.
Please remember that all credit counts
It's a common misconception that taking a credit card will help you get a mortgage. In fact, this could have the opposite effect if it leads a lender to believe you are over indebted, reliant on credit or miss payments. Even if you pay the balance off in full, you have still borrowed that money and it will still show on your credit file e.g. you have a credit card or buy now pay later account with a limit of £150, you spend £145 on that account but repay it immediately you could be viewed as using more than 50% of your available credit.