Mortgage lenders check your credit score as part of the mortgage application process to assess your creditworthiness and determine the level of risk they would be taking by lending you money.
Your credit score gives a credit history of any outstanding debts, missed payments, etc. It demonstrates that you can manage your finances responsibly. The higher the credit score, the better, as it indicates a good track record of paying your bills on time. In contrast, a low credit score suggests you may have had difficulties with repayments in the past or limited credit history.
Mortgage lenders use your credit score to assess the likelihood of you defaulting on your mortgage payments. So a low credit score could mean that you are perceived as a higher-risk borrower, which may result in a lender either declining your mortgage application or offering you less favourable terms, such as a higher interest rate or a lower loan-to-value ratio.
In addition to your credit score, lenders will also look at your income, employment history, and other financial commitments when assessing your mortgage application. However, your credit score is an essential factor that helps lenders make an informed decision about your mortgage eligibility and the loan terms.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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The information contained within was correct at the time of publication but is subject to change.