Credit education
Mortgage Charter Information: What It Means For Homeowners
Learn how the government’s new scheme can impact your credit report and score
Mortgage Charter update
In June 2023, the UK’s major mortgage lenders and the Financial Conduct Authority have agreed with the Chancellor a set of standards, a Mortgage Charter, to help consumers navigate their mortgage obligations and higher interest rates.
TransUnion supports the government’s Mortgage Charter relief scheme to provide consumers with new flexibilities to manage their mortgage payments over a short period.
We are currently creating guidance for finance providers on the credit reporting aspects of these schemes, which include moving to interest-only repayments for six months or extending the mortgage term, whilst minimising any impact to an individual’s credit score.
Learn more about how the government’s Mortgage Charter scheme can impact your credit report and score with our FAQs below.
Mortgage Charter FAQs
What is the Mortgage Charter/Mortgage Charter support scheme?
The government’s Mortgage Charter relief scheme aims to provide consumers with new flexibilities to manage their mortgage payments over a short period.
We’ve been creating guidance for finance providers on the credit reporting aspects of these schemes, which include moving to interest-only repayments for six months or extending the mortgage term whilst minimising any impact to an individual’s credit score.
How will using the Mortgage Charter schemes impact my credit score, both now and in the future?The Mortgage Charter schemes, which include moving to interest-only repayments for six months or extending the mortgage term, aim to minimise any impact to an individual’s credit score.
However, it’s worth remembering that your credit score can change for a number of reasons as the impact individual factors may have would vary, dependent on the wider picture. It’s important to keep up to date with any agreed payments.
Keeping a close eye on your credit report and score will give you a clear understanding of where you are and then you can take steps to improve your position over time if necessary. You can view your TransUnion credit report and score for free with providers such as Credit Karma, MoneySuperMarket, or TotallyMoney.
My score has changed but I’ve signed up to the Mortgage Charter scheme, so I thought it wouldn’t?
There are various factors that can affect your credit score. These shouldn’t be viewed in isolation as there are endless combinations which could alter the impact. The important thing is to monitor your credit report and score regularly and to understand the key factors that affect it.
There are simple steps you can take to improve your credit score, such as being on the electoral register, paying bills on time, or early if possible, avoiding keeping high balances on your credit cards and being careful not to make multiple applications for credit in a short space of time.
I’ve spoken to my mortgage provider and have accessed support as part of the Mortgage Charter. How will I or lenders see this on my credit report?
There’s no specific marker on your credit report to show you have accessed the Mortgage Charter support scheme. However, lenders will continue to be able to see your current balance, payments and term length.
It’s important to keep up to date with any agreed payments as these will be recorded on your credit report.
Will this mean my payments are reduced for the full term of my mortgage?
Please speak to your mortgage provider about this.
I’m on the Mortgage Charter scheme, but my payment / term hasn’t changed?
Please speak to your mortgage provider about this.
Would anyone be declined from the support schemes of the Mortgage Charter?
If your mortgage provider has signed up to the charter (the majority have done so) then the support schemes are open to all mortgage customers that are not in arrears on their payments.
Can I be declined for the interest-only payments?
If your mortgage provider has signed up to the charter (the majority have done so) then the support schemes are open to all mortgage customers that are not in arrears on their payments.
Start getting to grips with your credit report today
A good, healthy credit report isn’t achieved overnight; it takes time to build a strong, detailed credit history.
So, even if you aren’t currently looking to take a financial product, you may want to start the journey now to position yourself for the future — and these tips can help set you on the right path.