What credit score is needed to buy a house?
In the UK, there's 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 TransUnion.
These agencies are all separate from each other, so they'll 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 TransUnion’s is out of 710.
You may find you get a different score from each agency, but 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?
The definition of a 'good' credit score is different for every credit reference agency. 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 TransUnion, based on your credit score you are given a rating out of five. A score between 628 and 710 is given the highest rating of 5, which is considered excellent.
A high score means that lenders are more likely to consider you a lower risk as a borrower.
What is a bad credit score and how will it affect my chances of getting a mortgage?
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 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 both stable and comfortably enough 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'.
