Moving Home and Your Credit Score

There’s so much to think about when you’re moving house. Updating your address, setting up new utilities and redirecting your post, let alone packing up all of your belongings. Worrying about the impact on your credit score should be the last thing on your mind. While the act of moving house itself won’t affect your score, it’s worth preparing for the potential drop in your score due to other factors associated with it. We’ve pulled together a list of the things you might need to consider.

Your application
Whether you’re renting or buying, there will always be some form of credit check involved in the process. Landlords or letting agencies will usually only conduct a ‘soft’ search which is used to confirm your identity. This type of search does not leave a mark on your credit file and can’t be seen by other lenders. Applying for a mortgage, however, is a little more complicated. Most lenders will conduct a ‘soft’ search during your initial application process and only follow up with a ‘hard’ search when you formally apply for your mortgage. Since you’re only likely to do this once, it won’t affect your score drastically. However, some conduct a ‘hard’ search right away, so it’s worth checking with your lender beforehand if you’re concerned.

Frequent moving
Most lenders require at least three years of address history during any kind of credit application. If you’ve moved several times in this period, it can make you seem unstable to lenders. Though as long as you’ve been present on the electoral roll at each address, this should only have a minor impact on your score.

Taking on a lot of credit
It can be tempting to buy lots of new furniture for your new house, especially if it’s your first home. However, making several large purchases on credit can be seen by lenders that you’re reliant on credit, meaning they’re less likely to consider lending to you.

Keep an eye on your bills
In the chaos of moving house, things are bound to get misplaced or left behind, just make sure your bills aren’t one of them. Forgetting to pay your credit card bill can result in missed/late payment fees and potentially a mark on your credit file. Keeping a record of your bill dates can help ensure they don’t get forgotten about, or you could set up a direct debit or standing order for the payments so you have one less thing to worry about.

Update your address
Although it may be the last thing on your mind, try to update your address and contact details as soon as possible after moving. The top priorities should be any banks or credit providers as it’s often in their contract terms and conditions to keep your details up to date. This prevents them from sending important letters to the incorrect address and risking your information getting into the wrong hands.

A drop in your credit score, no matter how minor can be a worry but it’s worth remembering that this is usually only temporary. After a few months in your new home, things should settle down and your score should soon regain any losses.
Want more information about what impacts your credit score? See our blog, The Zen & Art of Credit Score Maintenance

Please note, none of these articles are intended to constitute financial advice and should be used for informational purposes only.