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How far back do lenders look at your credit history?

author: Adele Kitchen

By Adele Kitchen

Lenders will typically go back six years when looking at your credit history. So, it’s worth checking your full credit report to make sure it’s in tip-top shape before you apply for finance.

What is credit history and why is it important? 

Your credit history is a record of how well you’ve managed your finances over the previous six years, as shown on your credit report. It includes information such as:

  • bank accounts and lines of credit that have been open and closed
  • how much and the type of borrowing you have in your name (or joint names)
  • missed or late payments
  • adverse events (such as defaults, CCJs, bankruptcies and IVAs)
  • recent credit applications

Your credit history is important because it impacts your credit score and your creditworthiness, which can impact your chances of getting approved for finance.

For instance, if you have a good credit history, you should also have a good credit score. This will show lenders that you are a responsible borrower, and it should help you to get accepted for different types of credit such as loans, credit cards and mortgages – with competitive interest rates.

Bear in mind that, your credit report isn’t the only thing lenders look at though. They’ll also consider other factors such as your income and outgoings, your debt-to-income ratio, how close you are to your maximum credit limit, and if you have a stable address, for example.

How far back do mortgage lenders look at credit history? 

When you apply for a mortgage, the lender will carry out a credit check on you. Your mortgage lenders (like any other kind of lender) will only be able to see the past six years of your credit history.

Before you apply for a mortgage, it’s a good idea to check your credit report and make sure it’s in good shape. If you spot any mistakes, contact the relevant credit reference agency or lender as soon as possible to get them fixed. This should help to boost your score and your chances of acceptance.

How long does a default stay on your credit file? 

A default will stay on your credit file for six years from the date it was registered. A lender could default your credit agreement if you’ve missed three to six payments.

Unfortunately, it will still show on your report even if you pay off your debt in full, before the six years is up. This could harm your chances of getting approved for finance in the meantime.

Can you still get credit with a default? 

Getting approved for credit could be difficult if you have a default registered on your credit report. This is because lenders may see you as a high risk if you’ve not kept on top of your repayments in the past.

However, there are specialist lenders who may be willing to give you credit, but they usually charge higher interest rates. So, you may prefer to work on improving your credit score before you apply for a mortgage, to get a better deal.

There are some things you could do that may lessen the negative impact of a default:

  • repaying your debt - try to pay off the debt as soon as possible, so it’s updated as ‘satisfied’ on your credit report.
  • improving your credit score – this won’t happen overnight, unfortunately, but there are things you can do to boost it, such as always making payments on time
  • adding a notice of correction to your credit report – to help lenders understand your situation if you’ve faced difficult circumstances (such as losing your job or suffering from an illness).
  • giving it time - the more time that has passed since your account defaulted, the less impact it should have on lenders' decisions. Especially if you have been keeping on top of all your payments since then.

How do I correct something on my credit report?

If you spot a mistake on your credit report, (e.g., a default has been registered in error) you need to contact your lender and/or the relevant credit reference agency straightaway to let them know.

You will need to explain your dispute and you may also need to provide supporting evidence. The credit reference agency will need to speak to the lender to get their permission to remove the entry from your credit report, but they should be able to add a notice of correction in the meantime. This will let other lenders know that there is an ongoing dispute if you apply for further credit before the issue is resolved.

How do I obtain old credit reports? 

You can only go back as far as 6 years. It isn’t possible to access ‘old reports’ that go back more than 6 years. This is because, under the Data Protection Act, credit reference agencies can only keep your information for six years after an account has been closed or paid in full.

What is a good length of credit history?  

Another important factor to consider is not just how good your credit history is, but also how long it is. There is no magic number but having no credit history or thin credit history, can make it more difficult for you to get accepted for credit. Without any information about your financial past, lenders cannot tell how risky it’d be to lend money to you, so they tend to err on the side of caution.

Read on for tips on how to build up your credit history.

Disclaimer: We make every effort to ensure that content is correct at the time of publication. Please note that information published on this website does not constitute financial advice, and we aren’t responsible for the content of any external sites.

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