Mortgage Credit Reference Agencies
When you apply for a mortgage, a mortgage lender establishes whether or not they wish to progress your application, based on your income and personal circumstances. These circumstances include your credit history which is detailed in a credit report, this is held and updated by a Credit Reference Agency. There are three credit reference agencies in the UK: they are Experian, Equifax and Call Credit.
Credit reference agencies hold information on most UK adults, such as their registered addresses, registration on the Electoral Roll, any County Court Judgements (CCJs), bankruptcies and insolvencies, as well as any credit card, loan or previous mortgage applications. If you apply for a mortgage the lender will check your credit report and put a mark on your file.
Sometimes the information on your credit file has been shared with a third party, this can lead to a claim for a mis-sold mortgage. Take the test today »
Each time you take out a credit card, loan, or any other form of credit, information about your payments, if they were made on time and in full, is recorded on your credit report. Paying your mortgage repayments on time will improve your credit rating, as it shows future lenders that you are low risk
An improved credit rating means that you are more likely to be accepted for loans, mortgages and credit cards in the future. Importantly, it also determines how much you are allowed to borrow, since lenders will consider you less risky and are thus more likely to offer you a larger loan amount. If you have made late repayments or missed payments on a personal loan, or only made minimum credit card payments for a long period of time, you may find your credit rating is lower, and thus lenders do not offer you their best mortgage deal, or may refuse your application altogether.
Similarly, if you have never had any form of credit, you may find that lenders refuse your mortgage application. This is because mortgage providers have no credit history on which to base their lending decision: as a result they will consider you to be high risk.
If you have a poor credit history, you should consider the possibility that a poor credit mortgage is your only option, since mortgage lenders consider you too high risk for their standard mortgage deals. You can obtain a copy of your credit report for a small fee, by contacting one or more of the three credit reference agencies above.
Mortgage brokers are charged with finding you a mortgage with an interest rate and repayment amount that best suits your needs. Sadly here have been breaches to these rules.
Have you been mis-sold a mortgage? Take the test today»
