How Does Your Credit Score Affect Your Mortgage Rate in the UK?
Published 11th of October 2012·Updated 24 April 2026
Reviewed by: Reviewed for accuracy April 2026
Your credit score affects your mortgage rate directly. Lenders use it as one of the key measures of risk: the higher your score, the lower the rate they are likely to offer. A poor credit score does not always prevent you from getting a mortgage, but it will typically mean higher interest rates, a smaller choice of lenders, and a larger deposit requirement.
Short Summary
Mortgage lenders set their interest rates based partly on the risk level of the borrower. A strong credit profile signals reliability, and lenders reward that with lower rates.
The difference between a good-rate mortgage and a poor-credit mortgage can add hundreds of pounds to your monthly repayments over the life of the loan. A 1 per cent difference in rate on a £200,000 mortgage over 25 years adds roughly £25,000 in total interest.
Most high-street lenders, including Barclays, HSBC, NatWest, and Halifax, reserve their most competitive rates for borrowers with clean, strong credit histories.
Specialist lenders, sometimes called adverse credit or bad credit mortgage lenders, will consider applicants with defaults, CCJs, or a history of missed payments. Their rates are higher to reflect the additional risk.
Improving your credit score before you apply is one of the most effective ways to reduce the total cost of your mortgage.
How do lenders use your credit score when assessing a mortgage?
Mortgage lenders do not rely on a single credit score number. They look at your full credit report from one or more of the three UK credit reference agencies: Experian, Equifax, and TransUnion. Each lender has its own internal scoring model and risk appetite, which is why two banks may give you different answers on the same application.
Lenders look at: payment history, outstanding balances, length of credit history, types of credit, and recent credit applications. They also assess affordability separately, considering your income, outgoings, and the loan-to-value ratio of the property.
A strong credit score improves your chances of being offered a mortgage and getting a competitive rate. A poor score narrows your lender options and pushes rates up.
What credit score do I need to get a good mortgage rate?
There is no universal threshold, because each lender uses its own scoring system. As a general guide:
| Credit profile | Typical outcome with high-street lenders |
|---|---|
| Excellent (Experian 961-999) | Access to the best rates and widest choice of deals |
| Good (Experian 881-960) | Competitive rates; most mainstream deals available |
| Fair (Experian 721-880) | Some restriction on best deals; slightly higher rates |
| Poor (Experian 561-720) | Limited mainstream options; likely need a specialist lender |
| Very poor (below 561) | High-street lenders unlikely to approve; specialist lenders only |
These ranges use Experian's scoring scale. Equifax and TransUnion use different scales, but the principle is the same: a higher score means more options and lower rates.
How much more will I pay with a poor credit score?
The difference is significant. If a borrower with an excellent credit score is offered a 4.5 per cent rate on a £200,000 repayment mortgage over 25 years, their monthly payment would be around £1,111. A borrower with a poor credit score might be offered 6 per cent on the same loan, which is approximately £1,289 per month. That is a difference of £178 per month, or over £53,000 across the full term.
These figures are illustrative. Actual rates vary by lender, loan-to-value ratio, and the prevailing base rate set by the Bank of England. A whole-of-market mortgage broker can show you the real difference for your specific circumstances.
Can I get a mortgage with bad credit?
Yes, but your options are more limited. A number of specialist lenders, including Kensington Mortgages, Pepper Money, and Together, specifically cater for borrowers with adverse credit histories. They will consider applications from people with defaults, county court judgements (CCJs), a debt management plan, or a discharged IVA or bankruptcy.
The trade-off is a higher interest rate and usually a larger required deposit - often 15 to 25 per cent of the property value rather than the 5 to 10 per cent accepted by mainstream lenders. Working with a mortgage broker who specialises in adverse credit applications gives you the best chance of finding a suitable deal.
Does applying for a mortgage affect my credit score?
Yes. Every full mortgage application triggers a hard search on your credit file, which is visible to other lenders for twelve months. A single hard search has a small impact. Multiple applications in a short period look worse.
Use a mortgage broker or comparison service that runs a soft search eligibility check first. This shows you which deals you are likely to be accepted for without any impact on your credit score. Only apply formally once you have identified the right product.
How can I improve my credit score before applying for a mortgage?
Six to twelve months of consistent effort before you apply can make a real difference to the rates available to you. The most effective steps are:
- Pay every bill and credit repayment on time, every month
- Reduce outstanding credit card balances to below 25 per cent of your credit limit
- Register on the electoral roll at your current address
- Check your credit report for errors and dispute any inaccuracies
- Avoid applying for new credit in the months before your mortgage application
- Close any unused credit accounts that are not helping your history
If you are unsure whether your credit profile is strong enough, a free consultation with a whole-of-market mortgage broker will give you an honest assessment before you apply.
Frequently Asked Questions
Will a missed payment from years ago stop me getting a mortgage?
Not necessarily. The older a missed payment, the less weight lenders give it. Most high-street lenders are more concerned with the last twelve to twenty-four months of your credit history. A single missed payment from three or more years ago, with a clean record since, is unlikely to be decisive on its own.
Do mortgage lenders look at all three credit reference agencies?
Most lenders check one agency, though some use two or all three. Experian is used by the majority of mainstream UK lenders. It is worth checking your report with all three agencies before applying, as each may hold slightly different information.
Does being self-employed affect my credit score for a mortgage?
Being self-employed does not affect your credit score itself. However, lenders assess affordability differently for self-employed applicants, typically requiring two to three years of accounts or tax returns. Your credit score is assessed in the same way as for an employed applicant.
Can I get a mortgage with a CCJ on my credit file?
Yes, but it is harder. Some specialist lenders will consider applications where the CCJ was registered more than one year ago and has been satisfied (paid). A CCJ registered in the last twelve months significantly reduces your options. A specialist mortgage broker is the best starting point.
How long does it take to improve my credit score enough for a better mortgage rate?
Six to twelve months of consistent positive behaviour can move you from fair to good credit with Experian or Equifax. If your starting point is poor or very poor, allow twelve to twenty-four months. The closer you get to your target mortgage application date, the more careful you should be about any new credit applications or missed payments.