In a word…………..yes.
Mortgage lenders in the first and second charge markets are required by the Financial Conduct Authority to assess the credit worthiness of applicants. This includes an assessment of affordability, which of course includes the cost of current credit commitments. A look at an applicant’s credit file stored at a Credit Reference Agency is a very good way to assess how an applicant is managing their credit.
However what is often confused is the distinction between credit search and credit score, a situation that is not helped by CRAs ( Credit reference Agencies). Some are currently selling credit score products through a national TV advertising campaign and consumers can be confused.
Basically all mortgage lenders credit search, some do not credit score.
What’s the difference?
Search is looking at the factual information on file, such as voters rolls information, time at address and CAIS Data ( Credit Account Information System), scoring applies a points system to each piece of information. Lenders that don’t Credit Score can be particularly useful to applicants that have thin credit files, helping to avoid the chicken and egg situation of “ you can’t have credit, because you’ve got no credit”!
Top Tip: Need advice on a bad credit mortgage, speak to an Independent Mortgage Broker.