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Answered on 11 November 2019 by Nick Morrey
“I have no idea what my credit history is or whether I even have one at all. Do no credit score mortgages exist and how can I get one?”
There are mortgage options for people with no credit history - including some first-time buyers, returning expats and foreign nationals who can remain in the UK. These options are sometimes informally referred to as “no credit score mortgages” or “no credit mortgages”.
To explain how they work, we must first explain that a credit score is a 3 digit number that’s scored out of 1000 and based on your credit history – i.e. your borrowing and financial behaviour from the last 6 years.
There are 2 kinds of credit score you need to be aware of:
The credit scores provided by credit reference agencies - like Experian, Equifax or TransUnion – are useful for borrowers to see what level their credit score is and the overall state of their credit history. These scores don’t dictate whether a lender will give you a mortgage though. Lenders don’t even tend use these credit scores. Instead, they assign their own credit score to your mortgage application after they’ve carried out a credit check and reviewed the information you’ve provided them with.
What’s more, not all lenders use a credit scoring process. They still perform credit checks to see if you have any adverse credit – e.g. missed payments, CCJs (county court judgements) or arrears - but they don’t assign an actual credit score to your application. They underwrite applications manually which gives them the insight they need to judge them on a case-by-case basis, without attributing a certain credit score to either pass or fail or your application. These lenders offer mortgages that can be suitable for people with limited credit histories and are sometimes called “no credit score mortgages” or “no credit mortgages”.
If you’re a first-time buyer who has only recently started looking into purchasing a property, you may not have actively built up your credit history yet – but that doesn’t always mean you don’t have one.
If you’re on the electoral roll at your current or previous addresses, have a current account and haven’t moved around too much in the last 3 years, then you may have a better credit profile than you first thought.
It’s also worth bearing in mind that even if you do have a very limited credit history, your low credit score may be due to this rather than the existence of any adverse credit. Adverse credit is often a genuine problem for most lenders, whereas a lack of credit history simply means you need a lender that understands and accepts that this is normal for many first-time buyers.
We usually recommend you first look at lenders that do credit score and perform a credit check with a soft footprint, just in case your credit history is sufficient for their purposes. A soft footprint means that only you and the company performing the search can see they did a search, which in turn means it shouldn’t affect your credit profile with other providers. Credit checks typically show up on credit files and too many can negatively affect your credit score. If this kind of lender still declines your application, then you should consider looking at lenders that don’t credit score.
As we mentioned earlier, there are lenders that only perform credit checks to see if you have any adverse credit, rather than attribute a credit score to your application. They consider applications on a case-by-case basis which can sometimes help you obtain a mortgage if you have a limited credit history.
Nonetheless, we always recommend you try to build up your credit history and improve your credit score before taking out a mortgage, as this will give you access to more lenders, and therefore better deals. Building up your credit history will typically take at least 6 months. It may mean you have to wait a little longer before you purchase your first home, but you’ll be paying your mortgage for 20+ years so it’s worth aiming to secure the best deal possible.
We go through some tips on how to improve your credit score a little later on.
Your overseas credit history doesn’t count when you buy a property in the UK. However, it may still be possible to take out a UK mortgage if you’re putting down a significant deposit, have a good job with a steady income and don’t want to borrow beyond your means.
You’ll need a lender that doesn’t score your credit history or require that you’ve been living in the UK for a minimum time - although many expat lenders require that you have a UK bank account to make mortgage payments from.
It’s unlikely you’d be able to secure a mortgage this niche without the help of a specialist broker.
As a broker that specialises in expat mortgages, we’re able to look at your situation and help you put together a good case for why someone should lend to you. We know how to increase your chances of getting a mortgage with no credit history and which lenders offer “no credit score mortgages” for expats and foreign nationals.
Currently, there are 11 lenders that don’t require you to have lived in the UK for a minimum length of time and 4 of those will consider looking at applications where the applicant also has a limited credit history.
Although you can get a mortgage with no credit history, it’s worth – if it’s possible - trying to improve your credit score and overall credit profile. This is especially true if the reason you have no credit history and a low credit score is because you’re a first-time buyer.
To give yourself the best chance of getting a mortgage, you can:
For more ways to improve your credit score see our post: What Credit Score Is Needed to Buy a House?
Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.
We recommend you seek professional advice with regard to any of these topics where appropriate.