Credit Reports

Credit searches are conducted by lenders when people contact them either directly or via a mortgage broker to obtain a mortgage decision in principle. During this search a lender will obtain information usually from one of the three main UK credit rating agencies and this information will go a long way to forming their lending decision. Other factors will influence the lender but if something is found on your initial credit search that would make your application come outside of their lending criteria, it will almost certainly result in a decline.

Why are credit reports so important?

Your expert mortgage broker needs to know exactly what any lender will find out when they conduct a credit search. Credit reports contain much more information than just potential adverse or poor credit events. How much debt you may have, who it is owed to and how your account has been conducted will all be contained within your credit report. This information is key to a broker when they are looking at the right selection of mortgage lender for you. Incorrect credit data given to a lender can cause headaches for the application process, often resulting in lengthy holdups or even full-on lending declines.

What other information is on my credit report?

It is not just about how accurate the data is on your report. What if it is inaccurate? There are plenty of instances of brokers finding live credit accounts that people were either unaware of or thought that these accounts had been closed down. There are also instances where defaults or late payments can occur on credit accounts without an applicant’s prior knowledge. This could be a complete error on behalf of the company that the account is held with and will need to be rectified. Other issues can occur with accounts still registered at a previous address or associations with a third party who may have some bad credit. Address history is another piece of key information held within your credit report. It is important that a lender can match up both residential history with credit accounts being registered at the correct address.

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Do all of the credit agencies hold the same information?

Surprisingly, no they don’t. There are three main UK credit agencies; Experian, Equifax and Transunion. Your lender or service provider for utility bills, mortgages, credit cards, personal loans or mobile device accounts report monthly to a credit agency. Some will report to all three of them, some to two of them and some to just one credit agency. This can cause a problem when searching for a mortgage. A mortgage lender may not find inputted information during a credit search on you because they use Experian to pull your data from but some of your providers only report to Equifax or Transunion. For this reason, the mortgage experts that we work with will ask you for a checkmyfile credit report. Their reports show information from all three main UK credit agencies meaning that they will see all of the information needed to select the right lender and input the correct information needed to receive the right decision.

Is a credit search the same as a credit score?

The two things are linked but they are not the same. On your credit report you will see that there will be an overall credit score, usually between 0 and 999 and the higher the score the better your report will generally be. Most high St lenders will require that you pass their internal minimum credit score as well as checking other data held on you to gain a positive decision. Other lenders are more concerned with what is specifically contained within your report and are not as concerned with your actual score. Your mortgage expert will be able to ascertain which lenders to approach by looking at both of these factors once they have received your report.

So, do I definitely need a credit report?

Yes, you do. As outlined above, having access to the correct information will greatly enhance your chances of being accepted by a mortgage lender. Correct address history, up to date reporting of credit accounts and any instances of poor credit events being listed during a credit search will be key to your application process. Why not access a 14-day trial with checkmyfile here and give yourself and your mortgage expert the best chance of obtaining the right deal for you.

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As a mortgage is secured against your property, it could be repossessed if you do not keep up mortgage repayments.