Credit Score Requirement: What Lenders Look For and How to Meet It

If you’re hunting for a mortgage or a personal loan, the first thing a lender will ask for is your credit score. Think of it as the scorecard that tells banks how risky you are. A higher number usually means lower interest rates, fewer fees, and a smoother approval process. Below we break down the scores you’ll need for different types of loans and give you simple tricks to boost your number.

Typical Scores Needed for Common Loans

Most UK mortgage lenders set a minimum score around 620–640 for a standard residential loan. If you’re aiming for a high‑value property, like a £600k house, expect the bar to rise to 680 or higher. For a personal loan of £30,000, many lenders look for a score of at least 660. Below those thresholds, you might still qualify but you’ll likely face higher rates or need a larger deposit.

Quick Ways to Raise Your Credit Score

1. Pay down credit‑card balances. Your utilization rate—how much credit you use versus your total limit—should stay under 30%. If you have a £2,000 limit, try to keep the balance below £600.

2. Check your credit report for errors. Mistakes happen. Spot a wrong missed payment? Dispute it with the credit bureau and have it corrected.

3. Stick to a payment schedule. Late payments drag your score down fast. Set up automatic reminders or direct debits to avoid slips.

4. Avoid opening many new accounts at once. Each hard inquiry can shave a few points off. Open new credit only when you really need it.

5. Keep old accounts open. Length of credit history matters, so don’t close a well‑managed account just because you don’t use it often.

Following these steps can add 20–40 points in a few months, enough to move you from a “maybe” to a “yes” with better terms.

Remember, a credit score isn’t the whole story. Lenders also look at your income, debt‑to‑income ratio, and job stability. For example, someone earning £36,000 a year might qualify for a modest home if they have a solid score and low debts.

When you apply, ask the lender for a pre‑approval. It tells you the exact score they need and lets you shop around without hurting your credit further.

Bottom line: know the score range for the loan you want, clean up any obvious issues, and keep your credit habits steady. In a market where a few points can mean thousands saved, taking a little time now pays off big later.