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Mortgage Credit Check

How credits checks on mortgage applications can affect your credit history.

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By Pete Mugleston  | Mortgage Advisor Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 7th October 2019 *

Mortgage credit checks and their impact

We get hundreds of people asking us about how mortgage credit checks work, including commonly asked questions such as “will applying for a mortgage hurt my credit?”, and “does an agreement in principle impact my credit score?”.

Although many borrowers may have seen their scores change after applying for a mortgage, it’s not always the case. We have collated everything you need to know about mortgage credit checks in this guide.

The good news is that we work with experts who can apply to lenders who don’t impact credit score on initial application, and specialists who give the right advice for anyone with lower credit scores in general.

Make an enquiry today and one of the expert advisors we work with will review your situation and offer you the right advice with no obligation involved.

Topics discussed in this article:


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What is a credit check for a mortgage?

A credit check is when a company looks into your credit report to get a better understanding of your financial behaviour. There are two types of credit check: hard and soft, and we'll be discussing both of these in detail.

Lenders use a credit check for mortgage loan applications to determine your financial risk to them and to assess your repayment history.

Before you apply, it’s crucial to know just how much multiple mortgage applications affect credit scores. Applying for a mortgage without all of the relevant information can lead to unnecessary damage to your credit, so if you do have a poor score, you’re in the best place for mortgage advice.

Does applying for a mortgage affect your credit score?

This depends on how far through the process you are. If you make a full application, most lenders will leave a “hard footprint”, while they may only leave a “soft footprint” after an agreement in principle. Bear in mind, that all lenders are different, and some may do a hard search to reach an agreement in principle.

We discuss the difference between hard and soft credit checks in more detail later in this article, so read on for more information.

How long does a credit check take for a mortgage?

They're pretty much instant. A mortgage lender can call up and look over your credit report in a matter of minutes, assuming your case is straightforward. That said, complications can arise.

If the lender spots anything they don't like on your file, they might take a closer look, in which case it could take up to a few days for them to fully assess your creditworthiness.

How will getting a mortgage help my credit?

You improve your score by proving that you’re trusty to lend to by paying your mortgage on time every single month - you’re then considered a person with ‘responsible debt’, and someone who can borrow and repay on time.

How can a mortgage credit check impact your score?

As we've already discussed, the impact of a mortgage credit check on your score will depend on whether a soft credit check mortgage search or a hard credit check mortgage search is being conducted on your report.

Soft mortgage credit check

A soft mortgage credit check is an initial search on your credit score; a lender can see the main bits of information about you that they need to make a decision, but don’t necessarily access everything held in your report.

A mortgage soft credit search has no impact on your report score and doesn’t leave a visible mark for other potential lenders. The only person who can see a soft mortgage credit check on your report is you.

Hard credit check

A mortgage application credit check can impact your score if you’re instructing the potential lender to carry out a full, hard credit check on your file. A hard mortgage credit check allows a lender to take a full look at a person’s report, and leaves the search footprint on the report that an application for credit has been made.

Many hard searches in a short period of time can make it appear as though you are desperate for credit and this can certainly impact your score negatively.

What’s the difference between a mortgage credit check & a credit score?

A mortgage credit check is a summary of your financial reliability, essentially your history of paying debts and bills such as utilities, phone contracts and credit cards. The credit check is run on your report, usually by a credit reference agency.

Your credit score is a three digit number that’s used to represent all of this information, past and present, from your credit file. Typically, the higher the number is, the better you look to potential lenders.

Don’t read too much into credit reference agency scores

If your credit score is low then it might seem like your constantly being rejected for credit. The good news is that there’s no such thing as a universal checklist for credit approval.

Each lender has their own underwriting that will determine what criteria a borrower has to fit in order to be approved. There are lenders that specifically lend to those with a poor credit history so if your score is not great, don’t read too much into it!

What is the minimum credit score for a mortgage?

There is no set minimum credits score needed to get a mortgage in the UK that applies across the board.

The numbers the lender sees when they call up your credit report are open to their interpretation and the exact score they see will depend on which credit reference agency they use.

Experian, for instance, score out of 999 and a score of at least 700 is considered good while 800 would be deemed excellent. Equifax scores out of 700 and consider around 475 to be excellent.

Callcredit will score you out of five, one being uncreditworthy and five being low risk.

So should I check my credit score before applying for a mortgage?

The answer is absolutely. But remember, as mentioned above, credit scores generated by reference agencies are not the same as the score a lender will provide. Lenders search your report to make their own decision based on the information on your file, including account conduct and the like.

The benefit of checking your credit report first, is that you can give it to one of the specialist advisors, who can analyse the information and see what the lender see’s before making any application. They know what the lenders do and don’t accept, and can then match you with the right lenders first time, reducing the number of searches needed to get an approval.

You can check your credit reports here:


Get your credit rating



Does being declined harm your score?

As mentioned above, not necessarily. The presence of a hard search (approved or not) could lower your score with some agencies and lenders, but there will be no recorded decision on the outcome of that search. The lender may guess that it was declined if the borrower doesn’t then open an account with that lender, of course.

This is why it is so important to get the right advice prior to applying for any sort of credit, especially a mortgage – to avoid unnecessary searches with lenders that would not approve in the first place.

The experts we work with will review your credit report and match you with the best lenders before applying, so you can get it right the first time. They can speak to specific underwriters to discuss your particular case. Getting the right advice reduces the chance of being denied a mortgage, and saves you damaging your credit score in the process.

At what stages do lenders check scores?

The applicant will likely be subject to a hard or soft credit check for mortgage pre-approval (also known as decision in principle) and then with some lenders, a further search at the point of full application.

This is usually it, although occasionally some lenders can/will complete a final check before completion, or at any stage if something fundamental changes with the application (such as needing to borrow more money/adding/removing someone from an application).

How many credit checks are done when applying for a mortgage?

Usually two. You can expect to be hard searched at least once initially, and it should be fairly early in the lending process. If the lender decides to re run a credit check before mortgage completion, then this is normally to check the status of employment hasn’t changed over the process.

Multiple credit checks for mortgage applications with the same lender will not affect your credit score.

Will a mortgage in principle affect my credit rating?

This is a common question, and many people also want to know, does mortgage preapproval affect credit scores?

As mentioned, if the search is a soft-search, then no. If hard search, then it is recorded on your file, and can impact your credit score with some agencies and lenders, depending on how recent and how many searches are recorded.

How far back do mortgage credit checks go?

Mortgage lenders will typically assess the last six years of the applicant’s credit history for any issues.

How do different credit issues impact credit score

If you’re worried about previous credit issues, then gaining the right advice before applying is really important, so this would be a great time to talk to one of the expert advisors we work with.

Just because you’ve had previous issues with credit, it doesn’t necessarily mean you cannot get a mortgage.

The following credit issues are ranked in increasing severity; we’ve also included the likelihood of finding a mortgage lender in each particular scenario.

Multiple issues at once can further affect the decision but doesn’t make it impossible:

  • Low credit score - Most high street lenders are likely to decline a mortgage application from a prospective borrower with a low credit score but not all will.
    Some lenders don’t score an application; they check the credit file and if any negative events are in the lender’s specific criteria they will agree to lend.
  • Late payments - Some mortgage lenders can accept applications if the late payment is older than 3 years.
    Some lenders are happy if the payment was late in the last 12 months, and a few are happy if the customer is currently behind.
  • Defaults - The date that the default was registered is the most important factor in the decision because the more recent the default, the less likely a lender will be to accept.

Most lenders will likely decline if the payment default was within the last 6 years, some are happy if it was outside of the last 3 years, a few are happy if the default was registered outside the last few months, and a handful are even happy if the default was registered this month.

  • County Court Judgements - Same as defaults, although some lenders are less accepting of CCJs
  • Mortgage arrears - If you have been in a situation where you’ve faced mortgage arrears then the bad news is these are considered more severe than late payments for unsecured accounts (cards/personal loans etc).

However, there are lenders who will accept you if the arrears were over 3 years ago, some lenders are happy if the arrears were over a year ago, a few are happy within the last 12 months, and a small amount even consider current arrears!

  • Debt Management Plan (DMP) - The main factors that will be considered are the registration date and the settlement date.
    Most lenders decline if the applicant is in a DMP or have had one in the last 6 years, some are happy if it was over a year ago, and a few lenders are happy if the individual is currently in a DMP.
  • Individual Voluntary Arrangement (IVA) - Again, the main factor is the registration date and settlement date.
    Most lenders will decline if it was settled within the last 6 years, some may be happy if you settled over 5 years ago, a few may if it was settled over 3 years ago and 1 or 2 will consider you if you’re still in an IVA.
  • Bankruptcy - The discharge date is normally the deciding factor.
    The majority of lenders will decline if the applicant has ever been bankrupt, some are happy if you were discharged over 3 years ago, and a handful are happy if you were discharged 12 months ago. 1 or 2 will still consider you on Day 1 of your discharge.
  • Repossession - The date of the repossession is the most important.
    Most lenders will decline you if you’ve ever had one, some might be happy if it was over 6 years ago, few if 3 years ago, handful within last 3 years.

What mortgage can I afford to get?

This normally depends on your income and your perceived risk to the lender. Most lenders will be happy to offer a mortgage to the value of 4.5 x the borrower's income, some lenders may offer 5x and very few will offer 6x.

Does how long I’ve been employed make a difference?

Typically, the longer you’ve been employed, the more stable your income is perceived to be, so your score can be higher with many lenders.

If you’re employed, the lender will assess factors such as the time in the role, the contract type and your credit history. Many lenders want to see six to twelve months of payslips, some will be happy with three months and a few will consider you from day one. One or two will even accept a future job if you have a contract!

If you're self-employed, the borrower will likely have to provide 3 years of accounts to satisfy the majority of lenders. Some may ask the customer for 2 years of accounts, a few may be happy with a year, and a very small handful will accept 9 months trading.

How much deposit will I need?

We’re frequently asked about the amount of deposit borrowers with bad credit will need to put down. The deposit amount is normally determined by how much perceived risk the borrower poses to the lender and they may give you a higher credit score if you have a larger deposit.

Currently lenders will loan a maximum of 95% for residential properties, 85% for a buy to let property and 75% when it comes to bridging finance. So the minimum deposit you would need is 5%, although there are a handful of lenders who will lend 100% mortgages known as Guarantor Mortgages or Family Deposit Mortgages.

Do mortgage payment holidays affect credit rating?

If you’ve taken a payment holiday from your mortgage, or had a payment holiday on a previous loan or credit card, it all depends on how the lender has recorded this on your credit file.

With payment holidays or agreements to pay a different amount than was originally agreed, some lenders will consider the credit agreement as having been met, and not record any “arrangement to pay (AR)” on your credit file.

Other lenders will say they are happy with the arrangement, but still record this on your file as “in an arrangement to pay (AR)”. Some new lenders will consider this as negative and give you a lower score as a result.

What other factors can affect a mortgage application?

Below are additional issues that can come up when applying for a mortgage. If you’ve had bad credit and also fall into one of the following categories then you’ll need expert advice that’s tailored to your financial situation to find a specialised lender:

  • Buy to Let- the rules and deposit amounts for Buy to Let properties can be different from a typical residential mortgage.
  • Higher Loan to Value- If you’re a first-time homeowner, or simply haven’t got a large deposit to contribute towards finding a mortgage, then you will need a higher LTV.
    We can find specialist lenders to help you.
  • Unique Properties- Mortgages for unique properties are considered higher risk which generally means fewer lenders.
    This term covers listed buildings, high rise buildings, properties of non-standard construction and properties that are uninhabitable.
  • Older borrowers- Older borrowers can struggle because many mortgage lenders can apply a maximum age at the end of the term or cap applications at a certain age.
    Some have no restrictions on end of term age and it’s therefore important to find the right lender for your needs.
  • Large loans- if you’re taking on a large loan then your affordability, income and credit history may make finding a lender more restrictive.

Talk to an expert mortgage advisor today

Gaining tailored advice from an advisor could mean that a specialised lender could accept your bad credit mortgage application in the near future.

If you have questions and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0808 189 2301 or make an enquiry.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances.  We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.

Updated: 7th October 2019
OnlineMortgageAdvisor 2019 ©

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

Find out more about how we help people get mortgages with bad credit.

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