Getting a Mortgage With a 550-600 Credit Score

If you have checked your credit score and found it sits between 550 and 600, you might be wondering what kind of mortgage you will qualify for.

Here you will learn whether 500-600 is considered a good credit score in the mortgage world, what deals you can access with it and how to secure the best rate available.

Is 550-600 a good credit score for a mortgage?

Depending on which credit reference agency it came from, a credit score of 550-600 could be considered either good or poor. Not all UK mortgage lenders use the same credit reference agency, so your score won't be viewed in the same way across the board.

There are three main credit reference agencies in the UK and you will find a breakdown of what a credit score in this region means at each one of them below:

• Experian: Scores credit out of 999 and classes scores of below 721 as ‘poor’

• Equifax: Scores credit out of 1000 and classes scores of 531-670 as ‘good’

• TransUnion: Scores credit out of 710 and classes scores of 566-603 as ‘fair’

As you can see above, it is crucial to approach the right lender with a credit score of between 550 and 600 as it can mean very different things across the three agencies.

One thing to keep in mind, however, is that some lenders use a combination of credit reference agencies to get a broader picture of your financial history, and others don’t use credit scoring at all, which can work in your favour if your score is on the low side.

Can you get a mortgage with a credit score of 600 or under?

Yes. You might struggle to get a mortgage with a credit score of 550-600 from Experian and a lender that uses them as their credit reference agency. However, a mortgage provider that uses TransUnion may approve you, albeit with less favourable rates than one that uses Equifax, if one of those agencies is where your score originated from.

But the thing to remember is that there are mortgage providers who don’t use credit scoring at all to shape their lending decisions. These lenders still check your credit reports for bad credit and careless financial conduct, but aren’t interested in any numerical scoring systems.

They take a broader view of mortgage applicants and explore the reasons your credit history is less than perfect - for example, if your credit score is showing up as less than 600 because you are a first-time buyer currently living with parents (i.e. you haven’t had the chance to build credit history), some lenders will consider this mitigating circumstances.

In summary, it is possible to get a mortgage with a credit score of 600 or less if…

• There’s a legitimate reason your credit score is low

• You apply with a lender who does not use credit scoring

• Your score came from an agency that considers this credit score 'fair' or better and you apply with a lender that uses this agency

• Your application is strong in other areas, such as having a high deposit

As we’ve touched on already, finding the right lender is important as you may need one who doesn’t use credit scoring or will view your score favourably. It’s a good idea to speak to a mortgage broker before you apply so they can match you with one of these lenders.

Tips to improve your mortgage application

Credit scores and credit history aren’t the only factors mortgage providers take into account when assessing eligibility, but with a credit score of 550 to 600, preparing a strong application could help you access a wider range of lenders, rates and deals.

Here are some steps you can take to boost your chances of mortgage approval:

Put down extra deposit

You will need a deposit covering at least 5% of the property’s value to get approved for a mortgage, but putting down more than this (if you’re in a position to do so) can reduce the risk posed by your low credit score and help you qualify for a more favourable deal.

Build credit where possible

There are quick ways to improve your credit position before applying for your mortgage. These fast fixes could increase your credit score beyond 600 and open up more options.

Ways to build and optimise your credit files include:

• Joining the electoral register

• Opening a UK bank account

• Ensuring all household bills are in your name

• Paying all bills and debts on time and in full

• Take out a credit builder card and use it responsibly

Check your credit files for errors

You can download your credit reports by accessing a free, cancel-anytime trial at Checkmyfile. This service gives you access to all three of the main UK credit reference agencies, and you should check your files with each of them for errors and inaccuracies.

If you spot anything that shouldn’t be there, including outdated information, be sure to flag it up with the relevant credit reference agency so they can remove it for you.

Speak to a mortgage broker

With a credit score of 550-600, there are some mortgage lenders you might want to avoid, especially if your score was assigned by Experian or TransUnion.

But there could well be options available for you with lenders who don’t use those credit reference agencies, and ones who don’t credit score at all. Our brokers have deep working relationships with these lenders and can introduce you to the best one for you.

Teito’s mortgage brokers have access to the entire market and can often arrange exclusive deals with lenders who don’t credit score. Get started with one of our advisers below:

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Which lenders offer mortgages to borrowers with a credit score of 600 or under?

If your credit score of 550-600 came from Equifax, which assigns a ‘good’ rating to scores in this bracket, the following lenders may be an option as they use this credit reference agency:

• Coventry Building Society

• Halifax

• Metro Bank

• Accord Mortgages

• Nationwide

Lenders who don’t credit score could also be an option, especially if the reason your credit score is on the low side is adverse credit. They are usually specialist lenders, including:

• Pepper Money

• Bluestone

• Kensington Mortgages

• Scottish Building Society

• Furness Building Society

• Vida Homeloans

Bear in mind that while these lenders and others like them do not use credit scoring to determine eligibility, they will still perform credit checks to review your financial conduct.

The main thing that sets these lenders apart is that they are more interested in the overall strength of your application. If they spot any adverse credit on your files, they will review the age and severity of the issue, rather than base their lending decision on a numerical score.

What interest rate will you qualify for?

The interest rate you qualify for with a 550-600 credit score may vary depending on several factors. Firstly, the credit reference agency the score came from will play a part, as a 550-600 credit score from Equifax is considered 'good', and therefore lenders who use that agency may view your application favourably.

Rates can vary with lenders who don’t credit score, as many of them are specialist providers who tend to have slightly higher rates than normal due to their flexible criteria.

The reason your credit score is relatively low may also play a part in determining the rates you are offered. If it is the result of bad credit, this can drive up the rates you qualify for, but legitimate reasons such as having been living outside of the UK or being a first-time buyer who has only ever lived with parents could mean you are offered a standard rate.

Why choose Teito for your mortgage needs?

If your credit score is 600 or lower, it’s vital to speak to a broker before applying for a mortgage, and there are advisers on our team who specialise in clients with low scores.

Our brokers have expert knowledge and access to the entire market, which makes them ideally placed to pair you with the mortgage lender who’s the best fit for your credit profile.

Here are just some of the reasons our customers choose us for their mortgage needs:

• Our brokers specialise in borrowers with credit problems

• Your first consultation is free with no obligation to proceed

• We are 5-star rated on leading review websites

• You can apply for an agreement in principle through us in minutes

Ready to take advantage of a free, no-obligation chat with a whole-of-market mortgage broker and explore what options are available to you? Get started here.