Most banks will score you against pre-determined criteria within their individual lending policy. If you then pass the minimum internal level set by the bank, they will at that point refer your details to a Credit Reference Agency to check your repayment history.
Most major banks will utilise a combination of their internal credit score and a FICO Score (used by the credit reference agency) when deciding to agree or decline a mortgage loan.
From experience, if you pass the internal bank credit score, and your Credit Reference Agency Score/FICO Score is low, chances are they will still be willing to loan you the money, probably at a higher interest rate and with a larger deposit, and possibly asking you to correct some of the issues if past problems appear on your Credit File.
If you do not pass the internal credit score with the bank in the first instance, your loan will automatically be declined.
Every bank and lender has different internal scoring criteria. As a result, it is difficult to give a specific on what the ‘lowest credit score’ allowable is. Decisions to lend are not based purely on a credit score given by a credit reference agency, as indicated above.
I would suggest that due to the nature of how home lending is decisioned, you approach a lender specialising in sub-prime loans (if there are any left) – their initial internal credit scores tend to be more lenient, and they do not rely heavily on external Credit Reference Agency Scores.
Having been a banker in both the USA and UK, the lending process is virtually the same (with a few minor differences). Hope this helps.
