What does 'Credit Rating' mean when buying a property?
Find out what Credit Rating means when you are buying a property. 'What does Credit Rating mean?' plus over 150 other property related terms and jargon in plain English
Also known as a "Credit Score".
Credit Agencies keep a record of almost every person and assign them a credit rating which is a numerical score heavily weighted to two factors:
- How good that person has been at handling debt - known as Credit History. It is based on how well a person has kept up to date paying back loans or honouring certain agreements (such as monthly payments on a mobile 'phone).
- A credible record of places they have lived - often relying on the electoral register as the main source.
The credit rating or credit score is a number between 1 (never lend to this person) and 999 (this person is a creditors angel!).
Those who have rented property and not registered to vote or avoided debt often have a poor rating due to a lack of historical data and this will affect how much (or if at all) a lender will provide as a mortgage.
You can check out your own credit rating using a credit agency such as Experian.
I strongly recommend this because credit agencies can have partial and incomplete data. If you are able to provide documented proof that will help them fill in the gaps and resolve any errors you can dramatically increase your credit rating and avoid issues when your mortgage provider carries out their credit check on you.
For more on this and other tips and tricks you can use to make your property purchase go like clockwork pick up a copy of my ebook How to Really Buy a Property.