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    • Offset mortgages: term and payment reduction options
    • November 2019 Bank of England base rate
    • The general election candidates for the Chorley Constituency
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    • Can we expect sub 1% mortgagee deals?
    • How is Brexit likely to affect 2020 mortgages and house prices?
    • Interest rates in the UK, Europe and beyond
    • How the Great British Pound is faring against Euro and US Dollar
    • Help to Debt (HTD) – the importance of good advice when it comes to making borrowing decisions
    • Bank of England January 2020 base rate meeting
    • Lender Dual pricing: what it means to the mortgage seeker
    • Direct rates offered through lender portals can be costly?
    • Bank of England cuts the base rate to almost zero
    • Buying, selling and moving home during the pandemic
    • Tightening credit conditions in the mortgage market
    • One in seven takes mortgage payment holiday
    • The property market reopens for business
    • Lenders reintroduce 90% mortgage deals
    • Turbulent times for lenders
    • Easing out of lockdown
    • First-time buyer demand surges but options are limited
    • Stamp duty scrapped on homes under 500k
    • Competition watchdog investigates developers over mis-selling claims
    • UK economy may need further stimulus says the Bank of England
    • Your guide to mortgage valuations
    • Your guide to mortgage surveys
    • A quick guide to interest rates
    • A quick guide to inflation
    • The state of the housing market at the end Of 2020
    • What to look for in the 2021 property market
    • Price caps revealed for Help To Buy Scheme
    • Are 95% mortgages coming back?
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  • Mortgages
    • Introduction
    • 1st Time Buyers Mortgage Guide
    • 1st Time Buyer & Help to Buy
    • What is a Buy to Let Mortgage?
    • Buy to Let Mortgage Advice
    • Flexible Mortgages
    • Interest Only
    • Remortgaging
    • Repayment
  • Protection
    • Introduction
    • Do I need Income Protection Insurance?
    • Income Protection Advice
    • Why do you need Life or Critical Illness Insurance?
    • Critical Illness & Serious Illness Cover
    • ASU / Redundancy
  • Life Insurance
    • Introduction
    • Term Insurance Policies
    • Endowment Policies
    • Family Income Benefit
    • Guaranteed 50 Plus Life Cover
    • Whole of Life
  • Conveyancing & Solicitors
  • Surveys and Valuations
  • General Insurance
    • Introduction
    • Buildings & Contents Insurance
    • Compare & Buy Online Now!
    • Landlord Cover
    • Rent Guarantee
    • Home Buyers' Protection
    • Home Emergency Cover
    • Commercial Insurance
    • Professional Indemnity
    • Public & Employers' Liability Insurance
  • Will Writing & Estate Planning
  • Other Loans & Services
  • Articles
    • Bank of England Rate Rise
    • Fee Free Mortgage Advice
    • Negotiating the best price for your new home
    • Freehold versus Leasehold
    • Why you need advice on mortgages
    • Ten terms first time buyers will want to know
    • Buying process and dealing with estate agents
    • Selling property and marketing options
    • Help to Buy or not Help to Buy: that is the question
    • New home or pre-loved?
    • Interested in interest only?
    • Are lifetime mortgages on the rise?
    • General Data Protection Regulation (GDPR)
    • Solicitors and conveyancers
    • Joint Borrower Sole Proprietor Mortgages
    • The 3% stamp duty
    • First-time buyer stamp duty relief
    • Offset mortgages: how they work and who they work for
    • Self-employed mortgages versus mortgages for those employed by others
    • Mortgages: debts versus deposits
    • House prices increase swiftest in North West compared to rest of UK
    • Transfer of Equity
    • 10 Pitfall Mortgages
    • Remortgages versus product transfers
    • Limited Company Buy-to-Let Mortgages
    • Retirement Interest Only (RIO) mortgages and the new residential option between normal Interest Only and Equity Release
    • 2019 and our rate of interest predictions
    • Brexit and the property market 2019
    • Potential benefits of using a broker
    • The mortgage market: lenders and their existing clients
    • Mortgages and Relationships
    • Robo Advice: is it right for you?
    • Cheaper rates versus cheaper fees
    • Why online mortgage comparisons can be so vastly different
    • Affordability Calculators
    • Cashback Mortgages
    • Government Rent a Room Scheme
    • Government Marriage Allowance
    • The property market continues to move; and the North West is looking good
    • England letting fees banned and how this may affect you
    • Top credit file definitions
    • Understanding your credit rating
    • BTL, LTB, HMO & holiday let terms explained
    • Offset mortgages: term and payment reduction options
    • November 2019 Bank of England base rate
    • The general election candidates for the Chorley Constituency
    • 2019 year-end mortgage lending market
    • 2019 year-end house prices
    • Can we expect sub 1% mortgagee deals?
    • How is Brexit likely to affect 2020 mortgages and house prices?
    • Interest rates in the UK, Europe and beyond
    • How the Great British Pound is faring against Euro and US Dollar
    • Help to Debt (HTD) – the importance of good advice when it comes to making borrowing decisions
    • Bank of England January 2020 base rate meeting
    • Lender Dual pricing: what it means to the mortgage seeker
    • Direct rates offered through lender portals can be costly?
    • Bank of England cuts the base rate to almost zero
    • Buying, selling and moving home during the pandemic
    • Tightening credit conditions in the mortgage market
    • One in seven takes mortgage payment holiday
    • The property market reopens for business
    • Lenders reintroduce 90% mortgage deals
    • Turbulent times for lenders
    • Easing out of lockdown
    • First-time buyer demand surges but options are limited
    • Stamp duty scrapped on homes under 500k
    • Competition watchdog investigates developers over mis-selling claims
    • UK economy may need further stimulus says the Bank of England
    • Your guide to mortgage valuations
    • Your guide to mortgage surveys
    • A quick guide to interest rates
    • A quick guide to inflation
    • The state of the housing market at the end Of 2020
    • What to look for in the 2021 property market
    • Price caps revealed for Help To Buy Scheme
    • Are 95% mortgages coming back?
  • Enquiry Forms
    • Mortgage Enquiries
    • Protection Enquiries
    • General Enquiries
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  • Home
  • Understanding your credit rating

Understanding your credit rating

Credit scoring is, and has been, a pivotal part of lending decisions for more than two decades now.

It allows mortgage lenders and credit providers to make an unprejudiced decision on your credit-worthiness based on your current and historic financial circumstances.

So, effectively, lenders can see how good you have been at repaying your debts and how able you are currently to handle a new debt.

Most banks and building societies in the UK use Experian, Equifax or Call Credit, or a combination of any or all of these; because sometimes, certain providers or certain information may not show on one or other of these systems.

So, it is crucial for you to understand the impact your financial behaviour has on your ability to borrow money. In particular, with regard to mortgages in this case.

It’s fair to say that if you borrowed money from a friend and didn’t pay them back, paid them back late or they had to force you to go to court to pay the money back, then they – or your other friends or family – would be reluctant to lend you money, subsequently.

That is, in effect, credit scoring in layman’s terms.

When you are taking out a mortgage, a lender looks at three principles: the first being the ability to pay. This is evidenced by proof of income and bank statements, demonstrating what’s known as ‘affordability’.

The second factor is ‘security’. This being the property you intend to buy, it’s value and its saleability. This is normally proven by a lender sending their own surveyor to look at the property.

The third principle is known as ‘willingness to pay’. This is where credit scoring comes in, demonstrating to a potential creditor how good you are at paying your bills.

You need to satisfy the lender’s criteria in all three areas to secure a mortgage.

Some banks and building societies are more lenient with credit scoring than others. A good broker will point you in the right direction, should you have minor credit blemishes.

Here at Euxton, we are always happy to help with any credit enquiries you may have.

Company address: Euxton Mortgage Market, Hearle House, 5 East Terrace Business Park, Euxton Lane, Chorley, Lancashire, PR7 6TB
T: 01257208946 F: 01257208947 Email: info@euxtonmortgagemarket.co.uk

Euxton Mortgage Market are independent mortgage advisers covering Euxton and the surrounding areas, including: Leyland, Bamber Bridge, Farrington, Lostock Hall, Longton, Adlington, Charnock Richard, Croston and Rivington.

Adrian John Wood, trading as Euxton Mortgage Market, is an appointed representative of HL Partnership Limited, which is authorised and regulated by the Financial Conduct Authority.

*Some of these products are not regulated by the Financial Conduct Authority.

Adrian John Wood is entered on the Financial Services Register (www.fca.org.uk/register) under reference 682490.

H L Partnership Limited is entered on the Financial Services Register (www.fca.org.uk/register) under reference 303397.

The information contained in this website is subject to UK regulatory regime and is therefore intended for consumers based in the UK.

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