Thinking about getting a mortgage? Well, before you dive in, it’s smart to get your credit score and report in tip-top shape. Here’s the lowdown on how to do it:
1. Understand Your Credit Score
Your credit score is basically your financial report card. Lenders look at this number to decide if they’re willing to give you a mortgage. In the UK, you’ve got Experian, Equifax, and TransUnion—all dishing out scores that range up to 999. Your credit report is like a history book of all your financial behaviour. The higher the score, the better, but most lenders make decisions based on the information that leads to that score, so it’s worth sending us the full report!
We recommend obtaining your Credit Report from CheckMyFile as this brings together the data from all three Credit Reference Agencies.
2. Spot and Fix Errors
Once you have your report, it’s a good idea to see where you stand and spot any mistakes! Nobody’s perfect, and sometimes, your credit report isn’t either. Check for mistakes like incorrect information, address history or unfamiliar accounts. If you find any, get in touch with the agency to fix them. Trust me, it’s worth the effort.
3. Take Action
Pay your bills on time. Set up automatic payments or reminders so you never miss a due date. Consistent on-time payments make you look super reliable to lenders. If you don’t have much of a credit history, it’s time to build one. Open a credit card, use it responsibly, and pay it off each month. Over time, this will help boost your score. The length of your credit history also matters. So, hang onto those old accounts, even if you don’t use them often. Closing them can shorten your credit history and ding your score.
Applying for new credit can give your score a tiny knock each time. Try to limit new credit applications before you apply for a mortgage to keep your score steady.
Remember, it’s the information within your report such as bills being paid on time and total credit utilisation that have the biggest impact on your score.
4. Monitor Your Progress
Keep an eye on your credit score and report regularly. There are plenty of tools and services that can help you stay on top of your credit health and alert you to any changes. Staying on top of changes to your score can help you by quickly allowing you to correct errors that could otherwise damage your score and keeps you on track to improving it.
5. Get Some Expert Advice
If you’re feeling lost, don’t hesitate to seek help from a mortgage adviser like myself or a credit counsellor. We can give you personalised advice and strategies to improve your credit score to get you on track, ready for your next mortgage. While there are many lenders that can consider applications where there has been some adverse credit, this is often only possible by taking a higher rate.
By taking these steps to get your credit score and report ready, you’ll be in a much stronger position when it comes time to apply for a mortgage. So, hop to it and get ahead of the game—your dream home awaits!
