Mortgage lenders use credit scores to assess lending risk and determine interest rates. Higher scores achieve better mortgage deals with lower rates, whilst poor scores might result in rejections or expensive borrowing terms. Understanding credit scoring and taking systematic steps to improve yours before applying maximises your chances of approval and secures the best possible rates.

Understanding credit scores and reports

Three main credit reference agencies operate in the UK like Experian, Equifax, and TransUnion. Each calculates scores differently using information from your credit report, which records your borrowing history, payment behaviour, and financial connections.

Lenders don't see your actual score, they see your credit report and apply their own criteria. However, higher scores from credit agencies generally correlate with factors lenders favour. Check your reports from all three agencies, as information can vary between them and lenders may check different agencies.

Register on the electoral roll

Electoral registration represents one of the simplest yet most impactful ways to improve your score. Lenders use it to verify your identity and address, and being registered significantly boosts your credit profile.

Register at your current address immediately if you haven't already. This takes minutes online through gov.uk and affects your score within weeks. If you've recently moved, ensure you're registered at your new address rather than your previous one.

Review reports for errors and correct them

Credit reports sometimes contain errors like incorrect addresses, accounts you don't recognise, or inaccurate payment information. These errors can damage your score unfairly.

Review reports thoroughly from all three agencies. If you spot errors, dispute them directly with the relevant agency through their online portals. They must investigate and correct genuine errors, typically within 28 days. Common errors include old addresses remaining linked to your file, accounts showing as open when they're closed, or missed payments recorded incorrectly.

Pay all bills on time consistently

Payment history represents the single most important factor in credit scoring. Even one missed payment damages your score and remains visible for six years. Set up direct debits for all regular bills like rent if your landlord reports to credit agencies, utilities, phone contracts, and credit cards ensuring you never miss payments through oversight.

If you've missed payments previously, the damage diminishes over time. Recent payment history matters most, so six months of perfect payment behaviour begins repairing damage from earlier problems.

Reduce credit utilisation

Credit utilisation, which is the percentage of available credit you're using significantly affects scores. Using most or all your available credit suggests financial stress, even if you pay balances monthly.

Pay down existing balances or request credit limit increases to improve your utilisation ratio. However, don't simply increase spending to match higher limits the goal is showing you can access credit responsibly without maxing it out.

Avoid multiple credit applications

Each credit application leaves a "hard search" footprint on your report visible to other lenders. Multiple applications within short periods suggest financial difficulties or credit dependency, damaging your score.

Space credit applications several months apart. Use eligibility checkers that perform "soft searches" not visible to other lenders when researching credit cards or loans. When ready to apply for a mortgage, obtain agreements in principle from just one or two lenders initially rather than scattering applications broadly.

Build credit history responsibly

Paradoxically, having no credit history can be as problematic as poor credit history. Lenders need evidence you can manage credit responsibly. If you have minimal credit history, consider obtaining a credit-building card.

Use it for small regular purchases, pay the balance in full monthly, and never carry debt on it. This demonstrates responsible credit management without incurring interest charges. Several months of this behaviour positively affects your score.

Close unused accounts strategically

Old unused credit cards and accounts can help credit scores by showing long credit history and low utilisation. However, accounts you won't use and those with annual fees might be worth closing. Close accounts strategically rather than shutting everything simultaneously.

Financial associations matter

Joint accounts or shared credit creates financial associations between you and the other person. Their credit behaviour can affect your score. If you have financial associations with people with poor credit, consider explaining this to mortgage brokers who can advise whether disassociation helps.

Allow time for improvements

Credit score improvements take time. Start this process at least six months before planning mortgage applications, allowing positive behaviours to reflect in your reports and scores.

Contact us for guidance on financial preparation and mortgage options