Mortgage & Credit Glossary

See Mortgage in Principle — the same thing, sometimes called a Decision in Principle (DIP) as well.

A formal legal process for people who cannot repay their debts, typically lasting around 12 months before discharge. Remains on your credit file for six years from the date of the bankruptcy order.

A court order issued when a creditor takes legal action over unpaid debt and wins. Stays on your credit file for six years from the judgment date, whether or not it has since been repaid.

A document from the Insolvency Service confirming when your bankruptcy started and that you've been formally discharged. Usually required by lenders before considering a mortgage application post-bankruptcy.

A company that collects and holds data on your credit history. The UK has three main ones: Experian, Equifax and TransUnion — each with a different scoring scale, which is why your score can look different depending on where you check.

A number representing your creditworthiness, calculated differently by each credit reference agency. Mortgage lenders look at the entries behind the number as much as the score itself.

Recorded when a creditor decides you're unlikely to repay a debt as agreed, typically after three to six months of missed payments. Stays on your credit file for six years from registration.

The point at which bankruptcy restrictions lift, typically around 12 months after the bankruptcy order. The six-year credit file entry continues from the original order date, not discharge.

An informal arrangement to repay debts at a reduced monthly amount, usually set up with a debt charity or fee-charging provider. Being on or having completed one does not automatically prevent mortgage approval.

The UK regulator for financial services firms, including mortgage brokers and lenders. A firm authorised and regulated by the FCA can be verified at register.fca.org.uk.

A free, independent service for resolving complaints between consumers and financial services firms, if a complaint cannot be resolved directly.

A UK compensation scheme that can pay out if a financial services firm is unable to meet its obligations — though not every product is covered.

A mortgage where a parent or close relative agrees to cover repayments if the borrower can't, without being named on the property's title deeds or gaining ownership.

A credit check visible to other lenders, typically run when you submit a full application. Multiple hard searches in a short period can lower your credit score.

A formal agreement to repay a portion of your debts over a fixed term, usually five to six years, with the remainder written off at the end. Appears on your credit file for six years from registration.

A mortgage where a family member's income counts toward affordability without them being named as an owner of the property or on the title deeds.

The mortgage amount expressed as a percentage of the property's value. A 90% LTV mortgage means a 10% deposit; a lower LTV (bigger deposit) generally means more lender options and better rates.

A lender's initial indication of how much they might lend, based on the information you provide and a preliminary credit check. Not a guarantee — the full application still requires complete underwriting.

A landlord with four or more mortgaged Buy-to-Let properties. Lenders assess the finances of the whole portfolio alongside any new application.

Switching your mortgage to a new deal, either with your current lender or a new one — often to avoid a lender's standard variable rate, release equity, or secure better terms.

For Buy-to-Let mortgages, the requirement that expected rental income covers a set percentage — typically 125-145% — of the mortgage payment at a stress-tested interest rate.

When a lender takes back a property because the borrower has been unable to keep up mortgage repayments. One of the more serious marks on a credit file, remaining for six years from registration.

Describes whether a CCJ or default has been repaid ("satisfied") or remains outstanding ("unsatisfied"). The entry stays on your file for six years either way, but satisfied status is viewed more favourably by lenders.

A secured loan against your home's equity that sits behind your existing (first charge) mortgage, rather than replacing it.

A scheme letting you buy a percentage of a home (typically 10-75%) and pay rent on the remainder, with the option to buy further shares over time.

A credit check that doesn't leave a mark visible to other lenders and never affects your score, however many times it's done — used for initial eligibility assessments and checking your own credit report.

A lender focused on borrowers who fall outside mainstream/high-street criteria — including adverse credit, self-employment, or unusual income structures — using manual underwriting rather than automated scoring alone.

The rate a mortgage automatically reverts to once a fixed or discounted deal ends, typically higher than available fixed-rate alternatives. A common reason for remortgaging.