Credit score needed to buy a house

If you’re thinking about buying a house, you’ll likely need the help of a mortgage, unless you plan on paying for it outright. 

For this, you’ll need a decent credit score, to prove to banks you’re worthy of receiving a loan and can be trusted to pay it back in full and on time. 

Today, we’ll run you through how a credit score is measured, the importance it has on mortgage applications, and how our SIM-only credit-building phone contracts can help you. 

How a credit score affects buying a house 

Credit scores are reviewed for any type of loan or finance agreement - everything from car finance to mortgages - to determine your suitability. 

Scored out of 1000, they reflect how you’ve managed money in your life - including borrowing, repayments, how much credit you use, and how many payments you’ve missed. 

Different credit reference agencies (CRAs) use different scoring models, so it’s important to check which one your mortgage provider uses so you can match yourself up to their standards. 

Our partners at Equifax use the following scoring model: 

• Poor: 300-579

• Fair: 580-699

• Good: 670-739

• Very good: 740-799

• Excellent: 800-850

The better your credit score, the more likely you are to be approved for your mortgage application, as it shows you can responsibly manage your money and pay back anything owed.

Can I get a mortgage with a bad credit score?

Typically, you need a ‘good’ to ‘excellent’ credit score to get a mortgage, unless you visit a ‘bad credit’ mortgage provider. 

While ‘bad credit’ mortgages are helpful, they often include higher interest rates and fees with larger deposits, meaning you might have to lower the amount you wish to borrow. In turn, this can reduce your budget and housing options. 

There are a few things you can do to show financial responsibility and willingness to better your score, including: 

• Meeting payment deadlines - make sure any outstanding payments are paid in full, and on time, to show you can budget your income. 

• Cut down on spending - aim to keep your monthly outgoings similar each month, with money left at the end of the month, so you’re not living paycheck to paycheck. 

• Review your credit report - make sure all details are correct, and any errors are reported and removed from your account as soon as possible. 

How to boost a bad credit score

If ‘bad credit’ mortgages aren’t something you’re interested in, and you want to increase the likelihood that your application will be accepted, here’s what you need to do: 

Reduce credit application 

Applying for credit too often suggests you’re a bit too reliant on borrowing money and flags a hard credit search on your report, which doesn’t just bring your score down, but stays on your report for around two years. 

Before applying for a mortgage, avoid applying for credit at least six months before your mortgage application. 

Register to vote 

If you haven’t already, register to vote. 

Having your name and address logged on the electoral roll proves your identity and shows you have a stable place of residence. 

Stay within credit limits 

Keeping your credit utilisation low, with balances at 25% or less when possible helps keep your score at a steady rate. 

Join Boshhh

Boshhh - the credit-building mobile phone network - is an affordable and fuss-free way of improving your credit score. 

By creating phone contracts with bad credit customers in mind, we have been able to help thousands build their credit scores while accessing the leading mobile network in the UK (EE). 

Boshhh’s SIM-only credit-building plans help assist prospective homeowners boost their credit score and maximise their chances of getting approved for a mortgage. 

With four data plans to choose from, you can demonstrate financial responsibility by making regular payments based on your affordability and data requirements.. 

And, with no credit checks and guaranteed acceptance, our SIM-only deals can help you build a brighter financial future - even if you have limited credit history or have noticed a dip in your score because of missed or late payments. 

Get started with Boshhh today and get approved for a mortgage in the near future!