What does 'Credit History' mean when buying a property?

Find out what Credit History means when you are buying a property. 'What does Credit History mean?' plus over 150 other property related terms and jargon in plain English

Credit History

Each person has a credit rating or credit score (see Credit Rating) - this is a number between 1 and 999 which reflects how good (or bad) you are at handling debt.

In getting to this number one of the factors taken into account is your credit history - what have you borrowed in the past, when did you borrow it, over what period id you pay it back and were there any issues (such as missed payments).

Even a mobile phone contract can be included in this because in effect you are paying in arrears.

To have a look at your credit history you can use the services of a Credit Agency. Personally I use Experian. For a small charge they will let you know what information they hold on your credit history.

I recommend every buyer does this before they even start looking for properties as Credit Agencies can have errors or missing information which may make your credit history, and so your credit rating, look less attractive.

In these circumstances the mortgage provider may not lend you as much as you could otherwise borrow.

Credit Agencies will correct or update your Credit History if you can provide proof of events or items they are missing.

For more on Credit History, Credit Ratings and Credit Agencies and their role in a property purchase pick up a copy of my ebook How to Really Buy a Property.

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How to Really Buy a Property

"... forget, or don't know it is important, that: credit card debt which will be counted against us, we haven't been in the country much in the last few years so have little credit history, we had an argument with a loan company five years ago that went to court, we have moved home six..."
"... that went to court, we have moved home six times in the last three years and never got on the electoral register, we have never been in debt before and so have no credit history, we recently applied for other credit, even if it wasn't used, And so on, and so on. Sometimes you forget,..."
"... rates! As a word of caution only apply for the mortgage or mortgages you would definitely go for as each lender will carry out a credit check on you. As mentioned earlier too many checks on your credit history makes lenders suspicious that you are trying to apply for too much debt. Finally..."

"... a lender looks at you they are really looking at your earnings (that you can afford to pay the loan back on a month by month basis) and your credit history. Your credit history is a track record of previous debts. Every time you pay a credit card or loan on time you get points. The points go to make up your credit score. Every time you apply for credit such as a loan for a car, and every time you are late making a payment, you loose..."
"... system has some unwelcome side effects. If you apply for a few store cards in a month you may suddenly find it difficult to get a mortgage. This is because your credit history shows you are looking to borrow a lot of money and that might mean you are in financial difficulties. The result is that your credit score goes down and lenders don't want to go near..."
"... if you have not been in debt in the past you will also have a poor credit history and a low credit score. This is because there is no proof that you are any good at handling debt. It is the financial angels of life who have never had a credit card or taken a loan that can have the biggest problems securing a..."
"... Really Means). If you are applying for a mortgage there is a great deal more to go wrong. You have a low credit score due to a lack of credit history or a default at some point in the past Although you are earning enough, you have other debts which result in the bank agreeing to lend..."
"... the lender needs (such as bank statements) which take time to request You have not been in the country long enough to have an adequate credit history (usually three years are required, but again it depends on your LTV) You do not have the right to remain in the country forever The surveyor..."

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