Can I get a mortgage with no credit history?

illustration of Can I get a mortgage with no credit history?

There are many reasons why people might not have a credit history. Not having one doesn’t mean you’re bad with money, or won’t be able to get a mortgage. But because mortgage lenders need to assess you before they agree to give you a mortgage, having no credit history means they find that difficult.

Is it hard to get a mortgage without any credit history?

Yes, it can be. If you have no credit history, it’ll be harder to get a mortgage compared to someone who has a credit record, or a good credit score. Most mortgage lenders like mortgage applications to be very easy and straightforward. That means a lot of lenders will only accept people who can provide evidence they’ve been good with credit in the past. Ways they can tell you’ve been historically good with credit is if you have credit cards, utility bills, phone or internet bills registered in your name. The reasons why lenders tend to reject people with no credit history is because they have no information to go off on to determine if the mortgage applicant is high or low-risk.

Having no credit history can sometimes mean you show up as having a ‘poor’ credit score and this is something lenders will check. Most lenders will place great importance on your credit score, but some lenders are more flexible and understanding of the fact that everyone’s situation is different. 

Having no credit history as someone who’s just turned 18 won’t be too alarming to banks and lenders, because you’re presumably on the start of your credit journey. However, when you’re no longer a teenager and a young adult, no credit history can be concerning to banks. There are high street banks who will view your lack of financial history just as badly as a poor financial record. Luckily, some lenders aren’t that close-minded and will accept your application even if your credit history.

Read more about getting a mortgage if you don’t have a credit history on our page: Mortgages with no credit history

At Haysto, we help our customers find specialist lenders who can be more flexible with their lending criteria than most mortgage lenders. We work with reputable specialist mortgage lenders who specialise in particular financial situations and can offer you a mortgage even when other lenders can’t. Get in touch with us to make an enquiry and one of our specialist mortgage brokers will advise you on your options if you don’t have a credit history.

Why do people have no credit history?

There are many reasons why people don’t have any credit history.  A lot of the reasons are understandable but will result in there not being enough information for credit reference agencies to use to give you a credit score. 

You still live with your parents

The cost of living is expensive, so more and more people are choosing to live with their parents for longer. According to data from Statista, in 1997 35% of young adults lived with their parents, and that rose to 44% in 2018. 

Living at home with your parents can mean you can end up not having any bills in your name. You might not even have a bank account. These factors can mean you don’t have a credit history. This means credit rating agencies don’t have a lot of info about you. 

You’re not registered on the electoral roll

Being on the electoral roll is one of the simplest things you can do to make sure your credit score is in good shape. Not being on the electoral register can affect your credit score. It has not always been necessary to be on the electoral roll, so you might have been unaware of the changes to the law. Being on the electoral roll is an essential piece of data used for credit tracking as it makes you easily identifiable. Not being on the electoral roll will make you look suspicious to lenders.

If you’re not on the electoral roll, then that is the first thing you need to sort out. It’s not impossible to get a mortgage with no credit history but it’s near impossible to get one without being on the electoral roll. 

You’re new to the UK

Maybe you’ve lived abroad and come back to the UK, or maybe you’re starting a new life here in the UK. Sometimes, this can mean you don’t have a credit history or credit score in this country. Credit scores can’t be transferred from one country to another. Even if your credit score was excellent when you were living elsewhere, this doesn’t mean you now have a good credit score in the UK You will need to build up your credit in the UK again, so you can have a credit score. 

Your credit history is too old

You might’ve had UK credit accounts in the past but if a lot of time has passed since you’ve had one open, this could be a reason for not having a credit history. When you close a credit account, it will remain on your credit report for 6. After 6 years it’ll be removed from your credit report. Credit records will only keep the last six years of your transactions on file. 

Most people who have old credit history tend to be older people or those who live abroad for some time. It’s worth checking if there’s still anything on your credit report using your last known UK address. If nothing does come up, then you will need to rebuild your credit history all over again. If you think this could be a reason why you don’t have a credit history, work with a mortgage advisor to get together your old accounts. This will help any mortgage application you make.

How can I build back my credit history?

The good news is that it’s easier to build up a credit history from scratch than it is to repair a bad credit score. If you want to improve your credit score before getting a mortgage, read our Guide: How to Improve your Credit Score before a Mortgage Application.

In the meantime, here’s a list of things you can do to build up your credit history again:

Register on the electoral roll

The easiest and quickest thing you can do to start building up your credit history is registering on the electoral roll. Your credit applications won’t get anywhere if you’re not registered on the electoral roll. Make sure you are registered to vote and your address and personal details are correct. To check if you’re on the electoral roll, visit the Gov.uk website

Get a credit builder card

Credit-builder cards, like the Aqua Card, are credit cards which are made for people who have no credit or bad credit. As their name suggests, they help you build up your credit and also to improve your credit score. With no credit history, lenders have nothing to use to decide if you’re trustworthy and will make your mortgage repayments. Credit builder cards tend to come with low spending limits and a higher interest rate. Just make sure that if you’re getting a credit builder card that you make your payments on time. 

Open a UK bank account

You might be new to the UK, or you haven’t had a bank account in your name. Opening a bank account in your name will help you build up your credit history. It’s important to make sure you don’t get into debt or any unarranged overdrafts.

Take out a utility bill in your name

Paying bills on time will help to establish your credit score. You can take out an energy bill, internet, water bill or even a mobile phone contract. As long as these bills are paid on time, then you can build a good credit history.

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