5 things you can do to improve your credit score
12th May, 2014
Approach lenders for a mortgage and they’ll use credit reference agencies to verify how good your credit is. This is
common practice. A decent credit score will boost your chances of getting a mortgage, have a poor score and you’ll quickly be shown the door. Building a positive credit score is the way forward if you are planning on applying for a mortgage. This blog gives you a few pointers if you want to build and establish a good credit score.
- Register to vote – Are you on the electoral registrar? If not, notify the council and get listed as soon as you can. Keep your details updated. Prove to lenders you live at your current address, if you’re not on the electoral roll how do they know you are who you say you are?
- Cancel out of date credit cards – Don’t keep cards you don’t use, this will show as a line of credit on your score even if you haven’t used the cards in ages. Cancel old cards, if you don’t need them and haven’t used them for a while, get rid and see your credit score rise.
- Use current credit cards – If you have switched credit cards use the balances available, just be sure to keep up with the repayments. Lenders like to see you can manage your finances, it’s good to borrow money and pay it back, it shows you can be trusted.
- Keep up with mortgage payments – Missing mortgage payments will seriously affect your credit rating. Skip a few payments and this will show on your file. There are other solutions available if you experience financial difficulty so speak to your mortgage lender as soon as you can. Ask about going on an interest-only mortgage for a while or see if you can extend the length of the mortgage term to pay back what you owe.
- Stay within your overdraught limit – Stick with your agreed credit limits. Don’t go over your limit if you have an approved overdraught. Lenders like to know you are managing your finances, if you regularly go over your overdraught facility it looks like you are having difficulty staying in the black.
Finally, one last nugget of advice is to check your credit score on a regular basis, this way you know how healthy your rating is at any given time. Obtain your credit score though companies like Equifax or Experian and you’ll know where you stand when you apply for a mortgage.