There isn’t a specific credit score you need for a mortgage, and that’s because there isn’t just one credit score.
When you make an application for a mortgage or other type of credit, lenders work out a credit score for you. This is to help them decide if they think you’ll be a risk worth taking - if you’ll be a responsible, reliable borrower and likely to repay the debt. Usually, a higher score means you’re seen as lower risk – the more points you score, the more chance you have of being accepted for a mortgage, and at better rates.
How do lenders make their decisions?
Not all lenders think the same way, and they may have different ways of making their decisions. But all of them will look at some key factors to help them decide. These include:
- information on your on your credit report including your credit history and public record data (e.g. CCJs and IVAs)
- information you’ve given them on your application form
- information they may already hold on you, for example if you have a bank account with them
- their own lending policy, which may be different from those of other lenders
Looking at your credit report will give them a detailed insight into your credit history, and will show things like how much you owe on credit cards, if you’re registered to vote and if you’ve missed payments in the past. They’ll put that all together and give you a credit score of their own.
Mortgage affordability
But it isn’t just about your credit score. Mortgage lenders will want to see if you can afford your mortgage before they lend you the money, and be less of a risk to them. So as well as looking at your credit history they will look at how much you earn, and how much goes out. Not only credit repayments but regular, fixed costs like childcare, council tax, season tickets and other outgoings you have on a monthly basis.
If you can show them that you could afford your monthly mortgage payments even if your life situation changed or if interest rates (and your monthly payments) went up, it may help you get a mortgage even if your credit score is not the highest.
What can your Experian Credit Score tell you?
The credit score you need to get a mortgage varies, as there’s no one credit score or universal ‘magic number’. However, if you have a good credit score from one of the main credit reporting reference agencies such as Experian, you are likely to have a good credit score with your lender. Checking your Experian Credit Score before you apply for a mortgage can give you an idea of how lenders may see you, based on information in your Experian Credit Report. It can also help you work out if you need to improve your credit history before making your mortgage application.
What is a good credit score to get a mortgage?
The Experian Credit Score is based on the information in your Experian Credit Report. It runs from 0-999 and can give you a good idea of how lenders are likely to view you. The higher your score, the better the chance you have of getting the mortgage you’re after.
This table is a general guide to how lenders may see you, based on your Experian Credit Score - of course there are other factors involved, in particular how much deposit you have - which would bring the loan-to-value (the percentage of the overall cost that you need to borrow) down and could give the chance of lower interest rate deals.
Excellent
961-999
You could be in line for the best mortgage deals with lower interest rates
Good
881 - 960
You could get most but not all the best mortgage deals
Fair
721 - 880
You could get good mortgage deals with reasonable interest rates
Poor
561-720
You may get mortgage deals, but with higher interest rates
Very Poor
0-560
You may be declined a mortgage or find it harder to get one without very high interest rates
What if my mortgage credit check was poor?
Getting a mortgage for bad credit is by no means impossible but it will probably be harder and is likely to mean you’ll get high interest rates and need a large deposit.
Many people have poor credit scores simply because of their life situation - young adults with a short credit history, people who’ve not been in the UK long.
Mortgage lenders want to know if you can reliably keep up to date with monthly repayments and not go into debt. So showing them you can manage simple credit cards, mobile phone contracts and even some utility services could help you boost your credit score.
Improve your credit score for a mortgage application
One of the most important factors is to make credit payments on time. This ensures you don’t get any extra charges and lets you avoid having any missed or late payments on your credit report. Three more things to remember are:
- Avoid applying for credit in the six months before your mortgage application. Each time you apply for credit, a hard search is recorded on your report – too many of these can make it look like you’re overly reliant on credit
- Register to vote, as being on the electoral register helps companies confirm who you are and where you live
- Stay within your credit limits – if possible, keep balances at 25% or less of your limit, as this may help your score
And don’t forget to check your credit report to make sure the information on it is accurate and up-to-date - even a small change in the way your address is noted can affect your credit score.
If you find anything on your credit report that needs correcting - e.g. an address or a payment - get in touch with the lender in question and ask for them to amend it. Alternatively, we can contact the lender on your behalf.
Compare mortgages with Experian
FAQs
Credit score and mortgages
What is the minimum credit score for a mortgage? ›
You'll typically need a credit score of 620 to finance a home purchase. However, some lenders may offer mortgage loans to borrowers with scores as low as 500. Whether you qualify for a specific loan type also depends on personal factors like your debt-to-income ratio (DTI), loan-to-value ratio (LTV) and income.
Can I get a mortgage with a 600 credit score? ›
Yes, you can buy a house with a 600 credit score — but it would be less challenging if your score were higher. A 600 score will not be high enough to qualify for a conventional home loan, so look into FHA loans, which have lower requirements: 500 with a 10 percent down payment, and 580 with a 3.5 percent down payment.
What credit score is needed for a 300K house? ›
What credit score is needed to buy a $300K house? The required credit score to buy a $300K house typically ranges from 580 to 720 or higher, depending on the type of loan. For an FHA loan, the minimum credit score is usually around 580.
Is 700 a good credit score to buy a house? ›
Yes. Assuming the rest of your finances are solid, a credit score of 700 should qualify you for all major loan programs: conventional, FHA, VA and USDA loans all have lower minimum requirements, and even jumbo loans require a 700 score at minimum.
Can I buy a house with a 580 credit score? ›
You can get a mortgage with a credit score as low as 620, 580 or even 500, depending on the type of loan. Some mortgage lenders offer bad credit loans with more flexible qualifying requirements but higher costs. Others offer free credit counseling to help you improve your score before applying for a loan.
What credit score is needed to buy a $400,000 house? ›
Your credit score has less bearing on your ability to get a mortgage than you might think. The minimum FICO score for a conventional loan is 620. The best rate comes with a score of 740 or higher.
How long does it take to improve your credit score by 100 points? ›
In fact, some consumers may even see their credit scores rise as much as 100 points in 30 days. Steps you can take to raise your credit score quickly include: Lower your credit utilization rate. Ask for late payment forgiveness.
What is a good FICO score for a mortgage? ›
That's a FICO score of 670 or higher. The minimum credit score needed to buy a house can range from 500 to 700, but will ultimately depend on the type of mortgage loan you're applying for and your lender. Most lenders require a minimum credit score of 620 to buy a house with a conventional mortgage.
What credit score is needed to buy a house with no money down? ›
VA loans with no money down usually require a minimum credit score of 580 to 620. Low-down-payment mortgages, including conforming loans and FHA loans, also require FICO scores of 580 to 620.
If you make $70K a year, you can likely afford a new home between $290,000 and $310,000*. That translates to a monthly house payment between $2,000 and $2,500, which includes your monthly mortgage payment, taxes, and home insurance.
Can I afford a 300k house on a 50k salary? ›
A person who makes $50,000 a year might be able to afford a house worth anywhere from $180,000 to nearly $300,000. That's because your annual salary isn't the only variable that determines your home buying budget. You also have to consider your credit score, current debts, mortgage rates, and many other factors.
How much income do I need for a $400,000 mortgage? ›
Assuming a 30-year fixed conventional mortgage and a 20 percent down payment of $80,000, with a high 6.88 percent interest rate, borrowers must earn a minimum of $105,864 each year to afford a home priced at $400,000. Based on these numbers, your monthly mortgage payment would be around $2,470.
Is a 900 credit score possible? ›
Highlights: While older models of credit scores used to go as high as 900, you can no longer achieve a 900 credit score. The highest score you can receive today is 850. Anything above 800 is considered an excellent credit score.
How much house can I afford on $60 000 a year? ›
One rule of thumb when buying a home is to not spend more than three times your annual salary. If you earn $60K a year, that means you can afford to spend around $180,000 on a house, maybe a bit more if you have little or no other debts.
How rare is a 700 credit score? ›
Credit score distribution: How rare is an exceptional 800 to 850 score?
| FICO® Score range | Percent within range |
|---|
| 600-649 | 9% |
| 650-699 | 12% |
| 700-749 | 17% |
| 750-799 | 24% |
4 more rowsMay 31, 2023
The mortgage rate you can get largely depends on your credit score. Generally, a higher credit score means a lower mortgage rate. Those with excellent credit (720 and above) usually secure the best rates, while scores below 640 can lead to significantly higher rates.
What is the lowest credit score you can buy a house with? ›
Credit score needed to buy a house by mortgage type
| Loan Type | Minimum Credit Score |
|---|
| Conventional loans | 620 |
| FHA loans | 500 (with 10% down payment); 580 (with 3.5% down payment) |
| USDA loans | 640 |
| VA loans | The VA has no minimum limit, but lenders generally like to see at least 620 |
1 more rowJan 10, 2024
FHA Assumable Mortgage Requirements
Buyers wishing to assume an FHA mortgage must have a minimum credit score of 620, although buyers with scores above 580 may be eligible with additional restrictions.
How much can I borrow with a 580 credit score? ›
You can borrow anywhere from a few thousand dollars to $100,000+ with a 580 credit score. The exact amount of money you will get depends on other factors besides your credit score, such as your income, your employment status, the type of loan you get, and even the lender.
