Mortgages with no credit history

There’s loads of reasons someone might not have a credit history, so it’s unfair to be refused a mortgage just because you don’t have one. It’s very common for some people to not have a credit history due to living with parents or family (so your name won’t be on the bills). Because of this, it’s actually very common for first-time buyers to have no credit history. 

Another reason you might not have a credit history if you’ve just recently moved to the UK, or don’t have a UK bank account yet.

Because your credit file only covers a period of six years, you could end up with no credit history if you haven’t borrowed money in the last six years (the length of time that borrowing stays visible on your credit report). So it’s possible to have no credit history if you’re retired, paid off all your debts a long time ago or just haven't used a credit card or other kind of credit for a long time. If that’s the case, you’ll definitely be able to prove you do have a credit history, it’ll just take a bit of manual organising on your part to get together some historical proof of your credit history.

Here’s a list of common reasons you might have no credit history:

• You’re not on the UK electoral roll 

• You don’t have a permanent address

• You don’t have a utility bill in your name

• You’ve just moved to the UK

• You were living abroad but have now returned to the UK

• You’ve been living with your parents

• Your credit history is outdated (nothing on there for six years or more)

Your credit score is the evidence that a lender needs to assess the risk of lending money to you. A higher score means you’re ‘low risk’, which means you have a proven history of repaying debts on time. And a lower score suggests that you’re ‘high risk’ – having previously missed payments. 

Having no credit history means that a lender can’t assess your ability to make payments on time. Lenders want to minimise their own risk when approving a mortgage, and having no credit history doesn’t give them the certainty they want.

Most mortgage lenders will want you to have a credit score before they’ll be willing to offer you a mortgage. But there are specialist mortgage lenders who will consider you with no credit score. 

Generally, it’ll be specialist lenders who’ll be willing to consider your mortgage application if you don’t have a credit score yet. To find a specialist lender, you’ll need a specialist mortgage broker. That's where we come in! Our Mortgage Experts only do the tricky stuff. Make an enquiry and we'll find a way to help.

Before offering you a mortgage, lenders do a credit search to decide if they want to lend you money. They’ll do a credit check to get a clear understanding of your financial history.

Lenders will usually have a reason for doing a credit check on you. For example, you’ve applied for a mortgage with them. But you can get credit checked for other things too, like if you apply for a credit card or a store credit card.

Lenders differ in the way they conduct credit checks, but most will look for any past behaviour that could suggest you won’t pay your mortgage repayments on time. 

There’s two types of credit check. A soft check, and a hard check. 

A hard check is where a lender looks at the details of your credit history, and the check shows up on your credit file so it’s visible to anyone who checks your credit file. Too many hard checks in a short space of time can look concerning to lenders because they think you’ve got a lot of other financial commitments. 

A soft check is a lighter version of a hard check – just a brief look at your credit file. A soft check doesn’t show up on your file. When you check your own, that’s not visible to anyone else.

Usually, the higher your credit score, the easier it is to get approved for a mortgage. So it’s always a good idea to do what you can to build a score before applying. If you’re really pushed for time and need to get a mortgage soon; our Mortgage Experts can look at your options and work hard to find a solution. Get started online.

If you don’t have any credit history yet, it’s a really good idea to start building up your file. You can do that by thinking about what makes sense for you. It could be starting to pay a utility bill in your name, taking out a loan, or getting a credit card or some other kind of credit. Whatever you choose, make sure it’s realistic for you and will be manageable to repay. 

Here are some ways you can build your credit history:

• Make sure you’re registered on the electoral roll – you won’t be able to get a mortgage without doing this!

• Open a UK bank account –  if you’re new to the UK, or haven’t ever had a bank account in your name, it’s a great place to start as a way to build your credit history.

• Take out a utility bill in your name – this could be a mobile phone contract, an energy bill, internet or water.

It’s usually quicker to build up a credit history from scratch than it is to improve a bad credit score. So you’re at a good starting point! 

Lenders just want to see a proven track record of you managing your credit sensibly and making repayments on time, and this can sometimes take years. Speak to one of our Mortgage Experts who can help you understand your options. Get started online.

Your credit score is a number between 300-850. It’s an indication of where you are on a scale of ‘Excellent’ to ‘Poor’ when it comes to borrowing money. Your score is based on the information in your credit report. 

Your credit report is a detailed record of all the credit you’ve had in the past. This can be things like credit cards, mortgages and bills.

Your credit report contains this information:

• Your personal details like your full name, address history and electoral roll registration. 

• Your credit account history

• Your payment history

  Not sure what your score is? Here’s how to find out.