Posts

How can I improve my credit score?

Before applying for any mortgage, you should always check your credit report carefully, to establish if there is any reason why your application could be refused. You can obtain a copy of your report from a credit rating agency – the major ones include Experian, Equifax and CallCredit.

If you don’t like what you see, it’s not a disaster. There are ways you can improve your credit score, giving you a better chance of having a mortgage application accepted. We’ve put together three high impact areas you should focus on if you want to improve your credit score.

1. Pay Your Bills On Time

Lenders don’t like to see late payments as it might suggest that you are unable to successfully manage your current finances and therefore aren’t able to cope with further debt in the form of a mortgage. If you can pay off any payments before you apply for a mortgage, then do that!

2. Close Unused Accounts

Make sure to close any unused accounts that could be charging you unnecessary fees. Lenders will view old accounts as credit which is still available to you, and this might affect your ability to get new deals. Checking your credit report will help you to identify any accounts you may have forgotten about.

3. Get On The Electoral Roll

Being on the electoral roll provides valuable proof of your address to lenders – it is evidence of where you live and how long you have done for. Remember, lenders want to be reassured that you can pay them back and a stable living environment does just that. You can register at www.aboutmyvote.co.uk

Why A Credit Score Is Important

Having a poor credit rating isn’t the end of the world and certainly doesn’t mean you can’t get a mortgage, it does, however, make things slightly more challenging but there are lenders who are prepared to help those who have been rejected elsewhere. (Contact us for more information)

Banks and building societies want to be reassured that you will be able to pay back the loan so often comb through applicant’s financial history very carefully. They are looking to see if you have defaulted on any previous payments and often their offer will be determined on the following factors:

  • Credit report
  • County Court judgements
  • Any bankruptcy proceedings

If any of these scenarios apply, the chances are you won’t be eligible for most mortgage deals, or you will have to pay a higher rate of interest – even if your financial problems occurred a long time ago.

Remember that certain simple oversights, such as not being registered on the electoral roll, or failing to close credit card accounts that you no longer use, can have a negative impact on your credit rating.

 

Photo by Clique Images on Unsplash