How Lenders Check Your Credit, Income, and Commitments

How lenders check credit, income, and commitments. Discover what’s really reviewed and how to prepare your application.

When you apply for a mortgage, the lender doesn’t just look at your salary. They dig deeper into your financial life to understand how much risk you represent. From your credit history to your spending habits, everything plays a part.

Here’s how lenders assess your credit, income, and commitments — and how you can prepare.

Credit history: your financial track record

Lenders use a hard credit check to see your history of borrowing and repayments. They’re looking for missed payments, defaults, or evidence of responsible credit use. Even small things, like keeping within overdraft limits, can make a difference.

Income: proving what you earn

You’ll need to provide payslips, P60s, or tax returns if self-employed. Lenders want to see stable and consistent income that can support your mortgage repayments.

Commitments: what you already owe

Loans, credit cards, car finance, and childcare costs all reduce how much you can borrow. Lenders calculate these against your income to decide what’s affordable.

Bank statements: spending patterns

Many lenders request recent bank statements. They check for gambling, heavy overdraft use, or patterns of overspending. This helps them assess whether your lifestyle matches your stated affordability.

Other factors that influence the decision

Age, job stability, dependants, and even future plans like maternity leave can all influence lending decisions. It’s about painting a full picture of your financial position.

The Bottom Line

Lenders look beyond the headline salary. Credit, commitments, and spending all feed into the decision. The more prepared you are, the smoother your application will be.

Your home may be repossessed if you do not keep up repayments on your mortgage or other loan secured against it.

• Do all lenders check bank statements?

  Many do, especially if they want to understand spending patterns and verify income.

• Will childcare costs reduce how much I can borrow?

  Yes. Regular outgoings like childcare are factored into affordability checks.

• Does having a credit card affect my mortgage application?

  Not necessarily. Used responsibly, it can show good credit history, but large balances may reduce borrowing power.