Buying your first home is a major milestone. It’s exciting and daunting at the same time. While you’re saving for a deposit, browsing listings and working out what you can afford, your credit score might not be the first thing on your mind. Jacqui Hamilton, Consumer Affairs Executive at Experian, explains how your credit score works and why it is so important.
By following some simple habits, you’ll be able to write a happy ending to your homebuying story. Getting your credit ready sets the foundations for the next chapter, where you get the keys to a home that’s finally yours.
What Lenders Look For (and Why It Matters)
When you apply for a mortgage, lenders want to understand how you’ve handled money in the past and how you’re managing things now. Your credit report gives them this snapshot. It includes:
- Your credit accounts (such as loans, credit cards and mobile phone contracts)
- Your payment history over the past six years
- Any court judgments or insolvencies
- Whether you’re on the electoral roll
- Any recent applications for credit.
Your Experian Credit Score summarises all the information on your credit report, giving you a good idea of how lenders will assess you. Generally, the higher your score the better. This puts you in a stronger position to get accepted for the best mortgage deals – meaning lower interest rates and monthly payments.
However, when you apply for your mortgage, they don’t only look at your credit report. They normally look at three things to assess your overall “creditworthiness”:
- Your credit report
- Your affordability (eg income, expenses, childcare costs)
- Their own records (if you bank with them already).
They’ll use all this information to not only decide if they accept your application, but also the interest rate and the amount they’ll lend.
Your Homebuying Journey Starts with Your Credit Report
One of the best things you can do on your homebuying journey is to check your credit report early, ideally around a year before you apply for a mortgage. This is your chance to understand what lenders will see and to fix anything that might hold you back.
Building a great credit score can take time, so starting early puts you in the strongest position. To do that, we’ve laid out a one-year plan to get you on the right track to a great mortgage deal.
Six to 12 Months Before Applying:
Build Strong Financial Habits
If your mortgage plans are still around six to 12 months away, this is your moment to shape a strong credit profile. Small steps add up, and each one helps move you closer to that dream of becoming a homeowner.
1. Make sure you’re registered to vote
Being on the electoral roll helps lenders confirm your identity and can give your score an instant lift.
2. Streamline your old accounts
If you have old or unused credit cards or store accounts, consider closing the ones you don’t need, especially if they have fees attached. Just take care with accounts you’ve held for years, as they help show long-term stability.
3. Reduce debts where possible
Try to keep your credit card balances below 30% of your limit. Lower balances help your score and show lenders that you are managing your money with control.
4. Add context if you have been through difficult times
If you’ve had financial challenges because of life events such as illness, job loss or bereavement you can add a short statement called a Notice of Correction to explain the circumstances.
5. Remove financial links that no longer apply
If your credit file still connects you to an ex-partner or someone you no longer share finances with, you can request a financial dissociation.
6. Build a credit history if you need to
If you have very little credit history, it can be harder for lenders to assess you. A small, well managed credit-builder card that is paid off in full each month can help you show consistent, responsible behaviour.
7. Stay consistent with payments
One of the best things for your credit score is to make all your monthly payments on time. Make sure you’ve set up direct debits, even if it’s just for the minimum amount.
Every step here is a chance to strengthen your financial foundations and move closer to the moment you get to turn the key in your own front door.
Three Months Before Applying:
Keep Things Steady
As your application gets closer, it’s time to focus on stability and avoid anything that might disrupt your score.
- Avoid applying for new credit
New applications can temporarily lower your score, so it’s best to hit pause unless it’s necessary.
2. Double‑check all payments are covered
Even one missed payment can have an impact, so setting up direct debits or reminders can help keep everything on track.
3. Keep reducing balances where you can
Even small payments help. Reducing what you owe supports your score and shows lenders you’re in control.
4. Use soft-search tools for research
Soft searches let you explore what kind of mortgage deals you might be eligible for without leaving a mark on your credit report. Use quotations or comparison services such as Experian.
5. Be mindful of spending
Your affordability will be checked when you apply. A few months of calm, predictable spending can really support your application.
Application Week: The Final Checks
Now is the time for final checks to make sure everything is correct, and organised. Lenders will compare the information on your application with your documents and credit report, so:
• Check addresses match on all your accounts and electoral roll
• Keep job titles, dates and income details consistent on any applications or quotations
• Have your P60, three months of bank statements and your latest credit report ready.
First Time Buyer is an exciting bi-monthly glossy which takes a stylish and comprehensive look at all the options available, setting them out in an entertaining and informative way, and helping potential customers navigate their way through what is often a daunting and complex process. We dispel the myths, reinforce the facts and arm the reader with the tools necessary to make their homeownership dreams a reality.
