Your credit score plays a vital role in determining your eligibility for a mortgage in the UK. It offers lenders a snapshot of your financial behaviour and helps them assess the level of risk involved in lending to you.
While a good credit score doesn’t guarantee mortgage approval, it can significantly increase your chances of being accepted, and may even open the door to better rates and terms.
However, understanding what constitutes a “good” credit score can be confusing, especially since there’s no single universal score and different agencies use different scales.
This article breaks down what a good credit score looks like across the UK’s three main credit reference agencies, how your score is calculated, and why it matters when applying for a mortgage.
The UK’s Main Credit Reference Agencies
In the UK, there are three main credit reference agencies (CRAs): Experian, Equifax, and TransUnion. Each agency uses its own scoring system and range, so the exact number that qualifies as “good” can vary depending on which CRA you’re looking at.
Experian is the UK’s largest credit reference agency, using a scoring system that ranges from 0 to 999. According to Experian, a score between 881 and 960 is considered “good,” while anything above 960 is classed as “excellent.” A score between 721 and 880 is “fair,” and scores below this fall into the “poor” or “very poor” categories.
Equifax, another major CRA, uses a scale from 0 to 1000. On this scale, a “good” credit score falls between 671 and 810. A score between 811 and 1000 is considered “excellent,” while anything below 670 may limit your access to more competitive credit deals.
TransUnion operates on a smaller scale, with scores ranging from 0 to 710. A score between 604 and 627 is generally viewed as “good,” while scores above 628 are considered “excellent.” Scores below 566 may be seen as a cause for concern by lenders.
Because each agency gathers and interprets financial data slightly differently, your score can vary depending on which CRA is used. That’s why it’s important to check your credit reports with all three agencies to get a complete picture of your financial profile.
How Is Your Credit Score Calculated?
Your credit score is based on a range of factors that reflect your financial behaviour and borrowing history. While each CRA uses its own algorithm, most of them consider similar key elements:
- Payment History: This is one of the most important factors. Making payments on time shows lenders that you’re responsible with credit, while missed or late payments can significantly lower your score.
- Credit Utilisation: This refers to how much of your available credit you’re using. For example, if you have a credit limit of £5,000 and you’re using £4,000 of it, your credit utilisation is 80%, which may be seen as high. Lenders typically prefer to see usage under 30%.
- Length of Credit History: The longer your credit history, the more data there is for CRAs to analyse. A long, stable history of responsible credit use tends to improve your score.
- Types of Credit: Having a mix of credit types, such as credit cards, personal loans, and mobile contracts, can work in your favour, as it shows you can manage different forms of borrowing.
- Recent Applications: Applying for credit triggers a “hard search” on your file, which can cause a temporary dip in your score. Multiple applications in a short period can suggest financial distress and raise red flags with lenders.
- Public Records: CCJs (County Court Judgements), bankruptcies, and IVAs (Individual Voluntary Arrangements) are all visible on your credit file and will negatively affect your score for several years.
Each of these factors contributes differently depending on the CRA, but consistently making payments on time and avoiding over-reliance on credit are universal good practices.
Why Does Your Credit Score Matter for a Mortgage?
When you apply for a mortgage, lenders want to be sure that you’re likely to repay the loan reliably and on time. Your credit score provides them with a way to assess this risk. A good or excellent credit score tells lenders that you have a strong history of managing your financial commitments, which can improve your chances of being approved and help you access more favourable mortgage rates.
On the other hand, a low credit score may indicate a pattern of missed payments, high debt, or other issues that suggest financial instability. This can lead to your application being rejected outright or being approved only with higher interest rates and less flexible terms.
It’s also worth noting that different lenders have different criteria and risk appetites. A score that is acceptable to one lender may be too low for another, particularly among high street banks. Specialist mortgage lenders may be more flexible and willing to consider applicants with fair or poor credit, though you may need a larger deposit or face higher costs.
What Is a “Good” Credit Score for a Mortgage?
While there’s no single magic number that guarantees mortgage approval, having a score in the “good” or “excellent” category with at least one major credit agency will usually put you in a strong position. Lenders may use their own internal scoring systems as well, factoring in additional elements such as your income, employment history, deposit size, and the property type.
As a general rule of thumb:
- Experian: Aim for 881 or above.
- Equifax: Aim for 671 or above.
- TransUnion: Aim for 604 or above.
But remember, your score alone won’t determine the outcome. Even with a strong credit rating, you may be declined for other reasons, such as affordability issues, an irregular income, or a mismatch between your application and supporting documents.
How to Improve Your Credit Score
If your score isn’t where you’d like it to be, there are several steps you can take to improve it before applying for a mortgage. These include registering on the electoral roll, paying bills and credit cards on time, reducing your credit utilisation, and avoiding unnecessary applications for credit.
You should also review your credit reports for errors or outdated information, which you can dispute with the relevant CRA. Over time, consistent financial behaviour will naturally increase your score.
It’s a good idea to start preparing your credit profile at least 6 to 12 months before you apply for a mortgage, especially if you’re aiming for the most competitive rates.
A good credit score is one of the most valuable tools you can have when applying for a mortgage in the UK. While lenders consider a range of factors, your credit history remains central to their decision-making process. Understanding how your score is calculated, can help you take control of your financial profile and improve your chances of securing the mortgage you want.
If you’re unsure where you stand or need guidance on improving your score before applying, speaking to a bad credit mortgage broker such as AMS Mortgages can help. They’ll be able to review your full credit profile, explain your options, and connect you with lenders most suited to your financial circumstances.
