When
you apply for any type of financial product, in this case
a mortgage, you will have your credit rating checked.
Credit
rating is a way for the lender to see how reliable you have
been in the past with financial products. They need to make
sure you are worth the risk of lending you the money.
The
lender will look at why you're applying
for the mortgage ie is it sensible?
They will study your financial position ie your income and
outgoings.
In
addition a detailed credit check will be carried out.
The
mortgage lender will probably use one
of the two major credit reference agencies, Experian
or Equifax.
These
agencies hold a wide range of information on everyone and
have a - no doubt secret - formula for grading how good or
bad a credit risk you are.
They'll
know if you've had any past problems with a financial provider.
They'll
grade you by current address (in fact they're so clever that
if anyone in your house has ever had any bad credit that will
count against you too).
Despite being extremely thorough, the process should be fairly
quick.
What
you must be clear on is that there is very very little chance
of you being "cleared" if you have any history of
poor credit. The problem is more for people who are wrongly
labelled as having bad credit.
Important
Note
It's
very important not to apply to mortgage lenders who'll automatically
reject you, because every time you're turned down - regardless
of the reason - this will show on your credit rating and further
damage your chances of getting a mortgage.
