Getting a mortgage is a significant financial commitment, and your credit report plays a crucial role in the approval process.

A blemished credit report can hinder your chances of securing the best mortgage rates or even obtaining a mortgage at all. It’s vital to scrutinise your credit report for any red flags that could jeopardise your mortgage application.

Here are five red flags you shouldn’t ignore:

1. Late Payments

One of the most glaring red flags on your credit report is a history of late payments. Lenders rely heavily on your payment history to gauge your reliability as a borrower. A single late payment can reduce your credit score significantly, and multiple late payments can be even more damaging. If you have a history of late payments, it’s crucial to rectify this by setting up reminders or automatic payments to ensure timely bill settlement in the future.

2. High Credit Utilisation

Credit utilisation refers to the percentage of your available credit that you’re using. A high credit utilisation ratio, typically above 30%, can be a red flag to lenders. It suggests that you might be over-relying on credit, which could indicate financial instability. To improve your credit utilisation ratio, aim to pay off your balances and keep your credit card usage low. This will not only boost your credit score but also make you a more attractive candidate for a mortgage.

3. Frequent Hard Inquiries

Every time you apply for new credit, a hard inquiry is made on your credit report. While a single hard inquiry might have a minimal effect, multiple inquiries in a short period can be a red flag. It suggests to lenders that you might be desperate for credit or are taking on too much debt. If you’re planning to apply for a mortgage, avoid applying for new credit cards or loans in the months leading up to your mortgage application. Working with our expert advisors means you are not going though multiple credit checks with different lenders, which means minimal effect on your credit score.

4. Collections and Charge-offs

Accounts that have been sent to collections or charged off are significant red flags. These accounts indicate that you’ve defaulted on your debt, and lenders view this as a serious risk factor. If you have any collections or charge-offs, it’s essential to address them before applying for a mortgage. Contact the creditor to negotiate a payment plan or settlement, and ensure that these accounts are updated as paid on your credit report.

5. Public Records

Public records such as bankruptcies, tax liens, or civil judgments can severely impact your ability to get a mortgage. These records remain on your credit report for several years and can drastically lower your credit score. If you have any public records on your credit report, consult with a financial advisor to explore options for resolving these issues. Removing or resolving public records can significantly improve your chances of mortgage approval.


Your credit report is a vital component of the mortgage approval process, and ignoring red flags can be detrimental. By addressing these five red flags—late payments, high credit utilisation, frequent hard inquiries, collections and charge-offs, and public records—you can improve your credit score and enhance your prospects of securing a mortgage.

At Your Mortgage Shop, we understand that navigating the mortgage process can be overwhelming. Our team of experts is here to guide you every step of the way. Contact us today for personalised advice and to learn more about how we can help you achieve your homeownership dreams.

Let’s make your dream home a reality!

Share this story

More news

insurance for mortgage protection

Success Story: Turning a Down Valuation Around

At Your Mortgage Shop, we recently had the opportunity to assist a customer who faced a significant down valuation on a property they were e
life insurance for mortgage

5 Red Flags You Shouldn’t Ignore On Your Credit Report

A blemished credit report can hinder your chances of securing the best mortgage rates or even obtaining a mortgage at all.
common mistakes first time home buyers make

3 Red Flags to Watch Out for if You’re Looking for a Mortgage

3 Ways to Stop Procrastinating and Start Saving for Your First Home

Here are three actionable strategies to help you stop procrastinating and start saving for your first home
critical illness cover for mortgage

The Essential Guide to Understanding Benefits as Additional Income for Mortgage Applications

mortgage broker nottingham

How to Get a Mortgage on Low Income or Benefits

The Pros and Cons of an Interest Only Mortgage

3 Essential Insights First-Time Home Buyers Wish They Knew Sooner

At Your Mortgage Shop, we’ve put together  invaluable advice from seasoned first-time homebuyers to help you make informed decisions
when is the best time to get a mortgage

Green Mortgages: Financing Your Eco-Friendly Home Dreams

shine a light on an innovative financial solution that aligns with the values of sustainability and conservation: green mortgages
adverse credit mortgage advisors

How Debt Can Affect Your Mortgage Application: Insights from Your Mortgage Shop

This insight aims to demystify the process, shedding light on how debt can affect your mortgage application
first time buyer mortgage advisor, moving house

The Emotional Rollercoaster of Moving House: A Surprising Insight into the British Homeowner’s Journey

Moving house is often considered one of life’s most significant milestones, filled with both excitement and anxiety.
first time buyer mortgage advisor

Dealing with your mortgage during a separation