Over two thirds of people considering applying for a mortgage don’t know their current credit score

Credit

Latest research from Mortgage Advice Bureau (MAB) has found that over two thirds of people looking to apply for a mortgage or remortgage their existing home don’t know what their credit score is.

The survey found that consumer awareness around credit scores differed by age group. The older the respondent, the less likely they were to know their current credit score.

Overall, MAB’s research found 61 per cent of the 1,000 surveyed participants didn’t know how to find out what their credit score is. Over half (57 per cent) of 25 – 34 year olds polled, who are most likely to be first time buyers, didn’t know what their current credit score is, and 62 per cent of 35 – 44 year olds, the ‘second steppers’ and wanting moving up the housing ladder, weren’t aware of their current credit score either.

Two thirds of respondents aged 45 – 54, who are most likely to be remortgaging, were also unaware of what their credit score was.

Why is your credit score important for applying for a mortgage?

With mortgage legislation at its most rigorous ever following the introduction of tougher affordability and lending criteria over the last three years, a good credit score is a key indicator for banks and building societies when assessing how much they will lend to applicants, and what mortgage rate they will offer. 

Those with a good or excellent credit score are able to apply for some of the lowest ever mortgage rates available, whilst those with a poor credit score or adverse credit history are likely to pay a far higher interest rate and need a larger deposit to secure a mortgage, if indeed they are able to successfully apply for one at all.

Brian Murphy, head of lending for Mortgage Advice Bureau, comments on the findings of the survey: “The importance of a credit score when applying for a mortgage shouldn’t be underestimated, as alongside income, it’s one of the first things that many lenders look at when processing application.”

Credit Score top tips

Banks and building societies are cautious when it comes to assessing potential borrowers for a mortgage, and financial histories are always reviewed as part of the lending process, without exception. 

Companies like Experian, Equifax, CallCredit and Clearscore will be able to provide you with a thorough report of all your credit accounts, including outstanding loans and any missed or late payments over the last six years.

There are some really simple ways you can improve your credit score, by proving you’re a trustworthy individual who can manage your finances responsibly, for example:

  • Registering on the Electoral Roll
  • Having a landline telephone number
  • Show an account history
  • Declare your address
  • Use a credit card responsibly
  • Always make your repayments
  • If you have a poor credit score, stop applying for more credit
  • Don’t keep unused cards

Mortgage Advice Bureau is a leading mortgage network as well as the UK’s most recognised intermediary consumer brand*, winning over 70 national awards for the quality of its advice and service during the last 5 years.

*Based on Opinium Research, Summer 2016.