What credit score is needed to buy a house?
In the UK, there is no set minimum credit score you need in order to buy a house. However, if you’re buying a house with a mortgage, your credit score must be high enough for lenders to be willing to offer you a mortgage.
The exact score you’ll need varies from lender to lender, as their approaches to risk can vary, so some will require higher scores than others.
Here, we explain how credit scores work, and what sort of score you're likely to need if you want to buy a house.
What is a credit score?
Your credit score is determined by the three credit reference agencies, Experian, Equifax and Callcredit.
These agencies are all separate from each other, so they will each give you different scores. For example, your Experian score will be out of 999, whereas your Equifax score will be out of 700, and Callcredit’s is out of 710.
It’s a good idea to check them all, but don’t worry if you’ve got a different score from each agency – as long as the information they have about you is correct, this won’t affect your ability to borrow.
As a general rule, the smaller the mortgage deposit you have to put down, the better your credit score will need to be for lenders to accept your mortgage application.
What is a good credit score?
Whether or not your credit score is good depends on which credit reference agency you are monitoring it through. For example, according to Experian, a credit score of 700 or above is generally considered good, while your score is excellent if it is 800 or above. An excellent score with Equifax would usually be around the 475 mark.
With Callcredit, based on your credit score you are given a rating out of five. One is the worst rating, whilst three is neither very good nor very bad, so your mortgage application may be rejected with this rating. Five is the highest rating and lenders are likely to consider you low risk.
What is a bad credit score and can I get a mortgage with bad credit?
A low credit score means your mortgage application is more likely to be refused. However, if your score is lower than you’d hoped, don’t assume you’ll be automatically rejected for a mortgage.
Lenders will take other factors as well as your credit score into consideration when assessing your mortgage application. For example, it can help if you’ve already got a good record with them as a customer, and if your income is sufficiently high and stable to cover your monthly repayments. Having a good-sized deposit, typically 10% of the property value or more, will also work in your favour.
If you’ve had problems recently, you may be able to take out a mortgage with a lender who specialises in lending to those who’ve previously had credit issues, so it’s a good idea to seek expert advice on which lenders are likely to be able to help.
You should also look at ways to boost your credit score. Find out more with our guide 'How to improve your credit score'.