Building your credit score with your mortgage: a long-term guide
Taking out a mortgage is a huge financial step. It’s probably the biggest loan you’ll ever have. And while that might sound a bit scary, it’s also a great opportunity (as long as you keep up with repayments) to build a healthy credit score for the future.
But how does it all work? And what can you do to make sure your mortgage is helping – not hurting – your credit health? We’ll walk you through it. After all, managing your new homeowner budget is an important part of creating and maintaining healthy financial habits.
The immediate impact: your credit score in the first few months
When you first apply for a mortgage, lenders will do a ‘hard check’ on your credit file. This can cause a small, temporary dip in your score – usually lasting 12 months. Don’t worry, this is completely normal and expected by lenders. As long as you’re not making lots of other credit applications at the same time, it will recover.
You can learn more about credit checks in our guide.
The long-term benefit: how on-time payments build your score
This is where the magic happens. Your mortgage is a type of instalment loan, where you pay back an amount each month – and every on-time payment you make sends a positive signal to credit reference agencies (like Experian, Equifax, and TransUnion). Over time, this consistent payment history shows you can manage significant borrowing responsibly, which could help boost your credit score. It proves you’re reliable in the long run.
Showing you can handle a major financial commitment means you'll probably find it easier to get credit in the future. To keep an eye on how your score’s doing, there are plenty of ways to stay on top of your credit health in Monzo.
Looking ahead: how remortgaging and overpayments affect your score
Your mortgage journey doesn't end once you move in. Down the line, you might want to remortgage, and when you do, lenders may run another hard search on your file. If you've kept up with your mortgage payments, this could work in your favour when it comes to your credit rating. To learn more, read about how remortgaging works.
It's also worth knowing that while overpaying your mortgage is a fantastic way to save money on interest, it doesn't directly boost your credit score in the short term. The main benefit is financial, rather than a quick credit score fix.
Tips for making your mortgage work for you
Here are a few simple, actionable ways you can maintain a healthy credit score now that you have a mortgage:
Never miss a payment: this is the golden rule. A missed mortgage payment is one of the most damaging things for a credit score. If you're ever worried, it’s important to speak to your lender as soon as possible.
Manage other credit responsibly: stay on top of any other credit card or loan repayments to show lenders you can handle different types of borrowing well.
Check your credit report regularly: review your credit report at least once a year to make sure your mortgage payments are reported correctly – and to catch any mistakes early.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Did you know you can also see your mortgage in Monzo? It doesn’t even matter who your lender is. Connect your mortgage to Monzo in 60 seconds to see the impact of overpayments, explore market rates, and track your repayment progress over time.
Your mortgage: a long-term win for your credit score
A mortgage is a powerful way to build a positive credit history over time. It’s a marathon, not a sprint, and your consistency will pay off. Here’s a quick summary of the journey:
A small dip in your score at the start is completely normal
On-time payments are the key to steady, long-term growth
A strong payment history gives you more control over your financial future
By handling your mortgage and other lending responsibly, you’re taking a major step towards long-term money confidence. You can manage all of your finances with Monzo, every step of the way.
UK residents only. Ts&Cs apply.
Questions? Answers.
Will overpaying my mortgage improve my credit score?
Overpaying your mortgage is a great way to save money on interest and own your home sooner – but it won’t have a major direct impact on your credit score. The most important factor is making your regular payments on time.
What happens if I miss a mortgage payment?
A missed payment will appear on your credit file and is likely to have a significant negative impact on your score. It can stay on your report for up to six years. If you’re struggling, it’s always best to speak to your lender as soon as possible. You can also read our guide on what to do if you're struggling to make payments.
Does remortgaging affect my credit score?
It can do. When you remortgage, the new lender may perform a hard credit check, which can cause a temporary dip in your score – just like when you first applied. But as you keep up your repayments, your score will recover and continue to build. Staying with your current lender may not involve a new credit check though.