More than one in four (29%) of buyers don’t believe their credit score is ‘good’ or ‘excellent’, according to specialist mortgage broker platform Haysto.
Some 16% think their credit is ‘fair’, while 8% say it’s ‘poor’ and 5% believe it’s ‘very poor’. Meanwhile, 11% don’t know what their credit score is, meaning they could be in for a shock when applying for a mortgage.
The research, which looks at the impact of mortgage rejections, found that one in five (22%) potential homeowners who have had their dreams of ascending the housing ladder dashed say it’s due to their bad credit history.
The fear of credit scores is preventing people from making their home buying dream a reality, with 70% of people worrying they won’t get a mortgage because of their credit score.
Paul Coss, co-founder of Haysto, comments: “There are all sorts of reasons people miss monthly payments and find themselves labelled as ‘bad credit’.”
“This last year has thrown numerous curve balls into the mix – from furlough to redundancy – with many people taking home less money and perhaps missing monthly payments. That doesn’t mean they are not trustworthy and should be penalised for years to come.”
He says some buyers are made to feel like a bad person when their application is rejected, but automated online mortgage advisers don’t judge for themselves.
“It’s a case of: bad credit means computer says ‘no’,” he adds. “But even if you have bad credit, you can still get a mortgage. You’ll just have less options open to you than if you had a perfect credit score.”
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