5 tips credit score mortgage

5 things to improve your credit rating for a Mortgage

Getting and maintaining a good credit score is not a simple task. Even if you’ve never had debt in your life, that doesn’t guarantee you a perfect credit score. When it comes to getting a mortgage, you’ll need to make sure your credit score is the best it can be or you could be declined (depending on your circumstances).

There’s a lot of uncertainty around credit reports. You’ll probably be asking yourself, is mine really that bad? What do lenders look for? And most importantly: what can I do to improve it? The truth is, a poor credit score is a major negative for a large amount of high-street mortgage lenders, and even if you find a lender that will accept your bad credit, the rates could be astronomical.

Luckily there’s a few things you can do to get your credit score in shape, and even if you can’t get it to perfection, there are still some options we know to help you get a mortgage. This isn’t advice. This is just some factual info and ideas that you might want to think about. You should definitely seek professional advice for your specific circumstances (you can always contact us 😉 )

1 Take a good look at your credit report.

This sounds simple, but don’t just assume it’s fine, it’s an idea to make sure you know what you’ve got to deal with. Look closely, if there are any mistakes you could challenge them to help improve your score, depending on what they are. When you challenge a mistake on your credit report, the credit reference agency have up to 28 days to remove it or justify why it’s staying on your report. During that time, lenders won’t rely on anything that you’ve flagged in your credit report.

2 Plan and manage for the long term.

Depending on your circumstances, you might not be able to fix everything in a few months. You could start planning in advance to make sure your credit score is in a good shape. Leaving this to the last minute is not always wise for some clients, as an example. Improving your credit rating in the long term means demonstrating that you can handle borrowed money responsibly, and that takes time. It doesn’t happen overnight, so starting as early as you can could help things runs more smoothly.

Little things that could help to improve a credit score over the long term:

  • Pay all debts on time, or early if it’s possible.
  • Using a credit card responsibly could show to lenders that you can handle debts….
  • ….But make sure you know exactly what you’re getting into, check the limits and the interest rates, and most importantly: seek professional advice for your specific circumstances before you do anything. 

3 Do not take on more debt.

It’s a potentially bad idea to take on more debt or risks until you’ve sorted everything with the mortgage, at least. Even better if you can drop debt altogether. Also make sure that you cancel anything you’re no longer using – any unused credit cards that are still active need to stop. Check with a professional adviser about what’s best for your specific circumstances.

4 Make sure you are on the electoral register.

Check you are registered with the Electoral Roll at the correct address. You can register at any time online here. Your electoral roll details appear on the credit score so it’s important you are registered correctly. Also be aware that your credit score might not be updated overnight, so don’t leave it to the last minute. Give plenty of time for any changes to be made.

5 Take a break.

If you’ve been declined a mortgage recently, or had multiple credit checks, it could be better if you hold off for a while. Too many checks in a short period of time can deter lenders – it shows that either you’re looking to apply for more credit, or other lenders have checked your credit score and made the decision not to finance you. Gary Das usually recommends no more than 3 checks within 6 months.

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