A young person’s guide to building a healthy credit record

Buying your first home can feel like a distant goal, particularly when you are balancing rent, everyday bills and the rising cost of living.

Your credit history is one of the areas a lender may consider. Understanding how it works and taking small, manageable steps to improve it can help put you in a stronger position for the future.

What is a credit score?

Your credit report contains information about how you have managed financial commitments, such as credit cards, loans, overdrafts, mobile phone contracts and household bills.

Credit reference agencies use this information to produce a credit score. However, there is no single universal score used by every lender. Mortgage providers have their own criteria and will also consider factors such as your income, expenditure, deposit, existing debts and overall affordability.

Young people can sometimes have a lower score simply because they have not yet built up much of a credit history, not necessarily because they have managed money badly.

How can you build your credit history?

Check your credit report

Review your credit reports regularly and make sure the information recorded about you is accurate. Look for incorrect addresses, accounts you do not recognise, or payments wrongly recorded as late. Checking your own report will not damage your score.

Register to vote

Joining the electoral register at your current address helps lenders confirm your identity and where you live. You can register even if you are renting, living in shared accommodation or staying with your parents.

Pay bills on time

Late or missed payments can remain visible on your credit report and may affect future applications. Setting up Direct Debits or payment reminders can help you stay on top of regular commitments.

Use credit carefully

Using a credit card responsibly can help demonstrate that you can manage borrowing, but only spend what you can afford to repay. Ideally, clear the balance in full each month and avoid regularly using most or all of your available credit limit.

Never take out credit purely to improve your score if you do not need it or cannot comfortably afford the repayments.

Avoid multiple applications

Making several credit applications within a short period can concern lenders and may temporarily affect your credit score.

Keep your information consistent

Use the same name, address and contact details across bank accounts, bills and credit applications.

Will student debt affect your mortgage application?

Having a student loan does not automatically prevent you from getting a mortgage, and it is not usually treated in the same way as a credit card, personal loan or other commercial borrowing.

However, lenders may take your monthly student loan repayments into account when assessing affordability, as they reduce the income you have available each month.

The impact will depend on your income, monthly repayments, other financial commitments and the lender’s criteria. Lenders are generally more interested in how much is deducted from your pay than the total student loan balance.

Could Shared Ownership help you buy sooner?

With Shared Ownership, you purchase a percentage of a property and pay rent to a housing association or provider on the remaining share. You may also be able to purchase additional shares later through a process known as staircasing.

Because your mortgage is based on the share you are purchasing rather than the property’s full value, the mortgage and deposit required could be lower. However, you will need to budget for the mortgage payment, rent, service charges and other homeownership costs.

Why does your credit score matter for Shared Ownership?

A common misconception is that lenders are less concerned about your credit history because you are purchasing a share of a property rather than 100%.

In reality, lenders still carry out affordability and credit assessments in much the same way. Although the mortgage amount may be lower, they still need to be confident that the borrowing is sustainable.

A stronger credit profile can help by:

• Increasing the number of lenders that may consider your application.
• Potentially giving you access to more competitive mortgage rates.
• Making the application process smoother.
• Improving your chances of borrowing the amount you need.

Your credit score is not the only factor lenders consider, but building a healthy credit history could give you more options.

What if you have adverse credit?

Having adverse credit does not necessarily mean that you will be unable to get a mortgage or purchase a Shared Ownership property.

Adverse credit can include missed or late payments, defaults, County Court Judgments, debt management plans or previous financial difficulties. Lenders assess these issues differently, and their decisions may depend on:

• The type and amount of adverse credit.
• How long ago it occurred.
• Whether the debt has been repaid or satisfied.
• The reason the difficulty happened.
• How you have managed your finances since.

Some lenders may be more willing than others to consider applicants with previous credit problems. However, your options could be more limited, and you may need a larger deposit or be offered a higher interest rate.

Preparing for a mortgage

A mortgage lender will look beyond your headline credit score. It may review your bank statements, spending, outstanding debts, income and ability to manage the proposed monthly payments.

Before applying, try to reduce unnecessary borrowing, avoid missed payments and build an emergency fund alongside your deposit.

Speak to Just Mortgages

Whether you are building your credit history, concerned about student loan repayments, dealing with previous financial difficulties or ready to explore Shared Ownership, a Just Mortgages advisor can review your circumstances and explain your options.

Taking advice early could give you a clearer plan and help turn homeownership from a long-term ambition into an achievable goal.

Click here to book an appointment with Just Mortgages

Eligibility criteria apply to Shared Ownership. Mortgage availability and lending decisions will depend on your individual circumstances and the lender’s criteria.

Approved 13/08/2026

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE