Your Credit Report: What’s in it, and how does it affect Your Mortgage Application?

Written by Posted On Monday, 22 February 2016 06:17

Before applying for a loan – especially a long-term loan such as a mortgage – it pays to make sure there are no problems that can arise due to mistakes or negative notes in your credit report. Rest assured, your bank will check this and you might as well know what’s in it. The better your credit report, the higher your chances of getting a mortgage. But what exactly is a credit report, and how does it affect your mortgage application? Here is a short list of answers:

Who makes a credit report?

In the UK, there are three companies which create credit reports - these reports are taken from various sources then compiled into a file. These companies are Experian, Callcredit, and Equifax. Basically, they gather information from various sources and then create a credit profile to be sent to banks or other lending institutions. Your bank will review these credit reports with great care and will try to ascertain whether or not you present a high or low risk to the bank.

What’s in a credit report?

The short answer: a lot – everything that can be legally gathered about your credit habits. Institutions that lend money may be in competition with each other, but they do work together to share information about individuals who have defaulted on their loans or credits. Here is a short list of what information they would be looking at.

  • Your credit accounts. This includes loans at banks and credit card companies. You may have had a lot of debt in the past – but that in itself is not a problem. Banks will look at whether all the payments have been made, whether they have been made in full, and whether or not you ever had to make late payments. Your credit rating depends less on the amount of debt and more on your consistency of payment.
  • Public records. If you have ever been taken to court for financial fraud, repossessions, or late or incomplete payments, your credit report will mention this. Court cases are a matter of public record and anyone can view this.
  • Confirmation of identity. The credit report may ascertain your identity through various sources, such as your birth certificate, previous and current addresses, and civil status – even your voter’s registration, religious affiliates, and other information may be included.
  • Details of affiliates. If you have ever taken a loan or had a credit line whereby there was joint credit or whereby you had co-signers, these people will be mentioned as well. It is also entirely possible that certain information about these people will be mentioned.

Needless to say, a credit report is important for the bank – and therefore, to you. If you would like to receive expert guidance and mortgage advice when it comes to your credit rating, the best mortgage deals, and more, turn to mortgage specialists like Flagstone.co.uk.

Rate this item
(0 votes)
Shammy John

Shammy is an Real Estate Agent and Write an article on Real Estate, Home Insurance, Home Owner.

Realty Times

From buying and selling advice for consumers to money-making tips for Agents, our content, updated daily, has made Realty Times® a must-read, and see, for anyone involved in Real Estate.

Joomla! Debug Console

Session

Profile Information

Memory Usage

Database Queries