Your credit score can feel intimidating, especially if you are planning to buy your first home. Many buyers worry that one number will decide whether they can get a mortgage, but that is not the full picture.
In this episode of On the Ladder, Sarah Tucker explains what a credit score really is, why it matters when applying for a mortgage, and the simple steps you can take to improve it over time.
Watch the episode
What is a credit score?
A credit score is a snapshot of how you have managed borrowing in the past. It helps lenders understand how reliably you repay credit commitments such as loans, credit cards and phone contracts.
Mortgage lenders use your credit report alongside checks on your income, deposit and spending to assess how much risk is involved in lending to you.
You do not have just one credit score. Different credit reference agencies such as Experian, Equifax and TransUnion each use their own scoring systems. That means your score may look different depending on where you check it.
Why your credit score matters for a mortgage
A strong credit history can give you access to more lenders and potentially better mortgage rates.
If your credit history is weaker, it does not automatically mean you cannot get a mortgage. There are specialist lenders who support buyers rebuilding their credit, and a mortgage adviser can help you find the most suitable options.
How to check your credit report
It is a good idea to check your credit report before you begin house hunting. You can do this using services such as Checkmyfile, ClearScore or directly through Experian, Equifax and TransUnion.
When reviewing your report, look out for missed or late payments, old credit accounts that are still open, incorrect addresses, and high credit utilisation.
If you spot an error, you can usually raise a dispute with the credit agency and ask for it to be corrected.
How to improve your credit score
There are several simple habits that can help improve your credit profile over time.
- Register to vote so lenders can verify your address.
- Pay all bills and credit commitments on time.
- Keep your credit utilisation low, ideally below 30 percent of your available limit.
- Avoid making lots of credit applications close together.
- Use direct debits where possible so payments are not missed.
- Use credit responsibly and repay balances in full where you can.
- Keep older bank accounts open to show stability.
- Be careful with joint accounts and financial links
One issue many people do not realise can affect their credit score is financial association.
If you have a joint account with another person, their financial behaviour can sometimes affect your credit profile. This can happen with a former partner or even a shared account used for household bills.
If you are no longer financially connected, it is worth checking whether any outdated links remain on your report and asking for them to be removed if needed.
Key takeaway
Your credit score is not something to fear. It is something to understand.
Checking your credit report early, correcting mistakes, and building healthy financial habits can put you in a much stronger position before applying for a mortgage.
If you are unsure where you stand, a mortgage adviser can help you understand your options and guide you towards the right next step.
Full transcript
If you’ve ever Googled, “Is my credit score bad?” and squinted while waiting for the results, this video is for you.
Let’s get something straight. Your credit score is not some mysterious number that decides your fate. But it does matter, and lenders will look at it when you are trying to get on the property ladder.
So no more burying your head in the sand. I am going to talk you through exactly what a credit score is and how to get yours on track.
Welcome back to the series. In this episode, we are talking all things credit score.
Let’s start with the basics. You might think this has nothing to do with you because you have never heard of the credit score companies and never signed up with them. But if you have ever applied for a phone contract, a car lease or a store card, you already have a credit score.
It has been tracking how well you manage money that you have borrowed. It reflects whether you have borrowed sustainably, whether you have overstretched yourself, and whether you have made repayments on time.
When it comes to buying property, mortgage lenders use your credit score alongside other checks to work out how risky or reliable you are as a borrower.
But here is the twist. You do not just have one credit score. Each credit reference agency, including Experian, Equifax and TransUnion, has its own scoring system.
That means you may see three different numbers depending on where you check. What matters more than the number itself is what is inside your report. The real detail is in how consistently you pay your bills, how much credit you use, and whether there are any missed payments or defaults.
All of these are things you can take control of, no matter what your score says right now.
Now let’s look at why your credit score matters for your mortgage.
When you apply for a mortgage, the lender does not just look at your income and deposit. They also check your credit report to see how you handle debt.
They are potentially lending you a very large amount of money, so they want evidence that you pay things back on time, that you manage commitments well, and that you do not overstretch yourself.
If your credit history is strong, you may have access to more lenders and better rates. If it is not, do not panic. A mortgage adviser can help you find lenders who are a better fit, and there are even specialist lenders for people rebuilding their credit.
The next step is to check your credit reports.
You can view your report for free using services like Checkmyfile, ClearScore, or directly through Experian, Equifax and TransUnion.
It is a good idea to check all three because not every lender reports to every agency.
You will need to provide your legal name, date of birth and recent addresses so they can verify your identity and generate your report.
If the number comes back lower than expected, do not panic. At this stage, you are simply gathering information.
Once you have your report, there are four key things to look for.
The first is missed or late payments. These matter because they show a lender how you have managed credit. It does not mean you cannot get a mortgage, but it is important to know when they happened and why.
The second is old credit accounts that are still open. This could include a credit card you no longer use or an old mobile phone contract that is still active. Open accounts can affect your profile, especially if you did not realise they were still running.
The third is incorrect addresses. This happens more often than people think. If your address history does not match properly, lenders may struggle to confirm your identity when checking your file.
This is especially common if you live in a flat where address formatting varies slightly. It can also help you spot fraud or unusual activity if something appears that you do not recognise.
The fourth is credit utilisation. This means how much of your available credit you are using. For example, if you have a £3,000 overdraft or card limit, are you using all of it or only a small portion?
If you spot any mistakes on your report, you can dispute them with the credit reference agency. Once you provide evidence, errors can often be corrected quite quickly.
It is important that your report is accurate, even if it is not perfect, because then you and your mortgage adviser know exactly where you stand.
One useful habit is checking your credit report every month. It helps you stay aware of changes, correct problems early and track your progress over time.
Now let’s talk about the things that can help build a healthier credit score.
Registering to vote is one of the simplest steps because it confirms your address and helps lenders verify your identity.
Paying everything on time is also essential. Even one missed payment can stay on your report for six years, including something as small as a mobile phone bill.
Keeping your credit utilisation low is another important habit. Ideally, you should use less than 30 percent of your available credit limit.
You should also avoid making multiple credit applications close together, as this can make lenders nervous.
Using direct debits for bills can help make sure nothing is missed.
Credit cards are not automatically a bad thing. If you use one responsibly and repay it in full each month, it can actually help build your score.
Keeping older bank accounts open can also work in your favour because it shows stability and a longer financial history.
Some services, such as ClearScore, also offer credit score coaching with practical steps to help improve your score over time.
Another important issue to understand is financial association.
If you open a joint account with another person, this can create a financial link between you. In some situations, their credit behaviour can affect yours.
This often happens with former partners, but it can also happen with shared household accounts.
If you are no longer financially connected to someone, it is worth checking your report and asking for outdated links to be removed.
If you buy a home jointly with a partner or friend, you will become financially associated with each other, so it is important to understand how that may affect future applications.
There are also a few myths worth clearing up.
Checking your own credit score does not lower it. That is a soft search and has no negative effect.
You do not need a perfect credit score to get a mortgage. Lenders look at your wider financial picture, not just a single number.
And having no credit history is not the same as having good credit. If you have never borrowed anything, lenders have no evidence of how you handle credit, which can make them cautious.
If that is your situation, starting small can help. A phone contract, a low limit credit card used responsibly, or paying bills in your own name can all help build a track record.
If you are feeling anxious about your credit score not being perfect, you are not alone. Most people have something on their report they would rather not see.
It does not mean you have failed. It does not mean you will never get on the property ladder. And it does not mean your situation cannot improve.
By understanding your report and taking action early, you are already moving in the right direction.
A good mortgage adviser can help you find lenders who understand that life happens. Late payments, address changes or previous financial hiccups do not always stop you getting a mortgage.
There are also credit builder products and secured cards designed to help people rebuild their score responsibly, as long as they are used carefully and from trusted providers.
So the key message is this.
Your credit score is not something to fear. It is something to understand and work with.
It is your financial footprint, and it can be improved over time with small, consistent habits.
Your next steps are simple. Check your credit score, understand what your report is telling you, set a reminder to review it regularly, and make a plan to deal with any errors or issues.
Doing this now can give you a much stronger position before you start house hunting.
When it comes to getting a mortgage, knowledge really is power, and your credit report is one of the best places to start.
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