Guide to Improve Your Credit Rating
In the current economic climate, your credit rating matters more than ever.
These top tips could help you to get the deals you need.
Check your Credit Report
Your credit report is a key element of your financial CV. Lenders look at it when you make an application for a loan, card, mortgage or other type of credit to see how much you already owe, how well you are coping and whether you can afford to borrow more. Check your credit report regularly to make sure it’s up to date and accurately reflects your circumstances. You can see your credit report for free with CreditExpert.
Understand What Lenders Want to see
Mortgage lenders don’t expect you to be perfect but they do like to see that you are stable and reliable. They want to know that you will make repayments on time and in full, that you aren’t already over-stretched and that you can comfortably afford to honor your agreement with them. They do not want to see a patchy credit history that shows missed repayments or bad debts it means that you could let them down too.
Always Pay on Time
Always pay your bills and make monthly repayments in full and on time. As well as incurring penalties, missed and late payments stay on your credit report for at least three years and give lenders the impression that you could be a bad risk. If there’s a good reason for past problems maybe you were ill or going through a divorce you can add a brief note of explanation to your report.
Your home may be repossessed if you do not keep up repayments on your mortgage
Close Unused Accounts
If you have any unused credit accounts, close them lenders can take into account the amount you could borrow, not simply what you currently owe. It’s better to have fewer, well-managed accounts. Your credit report contains a useful list of lenders, which can act as a reminder and checklist.
Consider Consolidating your Debts
Identify which credit accounts are the most expensive for you and see if you could roll them up into a single, lower-cost loan. You could also look for a zero per cent balance transfer or a credit card that offers a low- or no-interest introductory period you could then use the time this gives you to reduce your debts.
Register to Vote at your Ccurrent Address
Mortgage lenders use the electoral roll as a precaution against fraud, to check that you live where you say you do. If you are not registered or are listed at another address, they may ask for further proof of identity and residence or even turn you down.
Don’t Leave Footprints
When you’re researching credit deals, make sure that lenders understand you only want information. Every application for credit triggers a search of your credit report that leaves a record, known as a footprint. If other lenders see a lot of these, they can think you’re desperate for cash or suspect a fraud.
Protect your ID
Watch out for unfamiliar or suspicious entries in your credit report, such as an account you didn’t open, a sudden surge in the amount you owe or new applications you didn’t make they could mean you’re a victim of ID fraud. Contact the relevant lender at once, explain your position and be prepared to provide proof that you aren’t responsible.
Check your Experian credit report online with a free trial of CreditExpert, the UK’s leading online credit monitoring and ID fraud protection service.
No Fee Mortgage Advice
If You would like to speak to a mortgage advisor about how much you can borrow or are concerned about you mortgage credit score please contact us for no fee mortgage advice .
Debt Consolidation
Debt consolidation is not always the most suitable option, consolidating debts must be carefully considered. It will usually mean more interest over a longer repayment term and there may also be early repayment penalties on your current mortgage, you should think carefully before securing other debts against your home. There are other ways to manage debt such as free debt advice charities, you can find out more by contacting the Money Advice Servicethese services may be more suitable for you.
