It is a question that we get asked all the time.
The credit score is as important in terms of getting a mortgage as say how much you earn or how much a deposit you have. Indeed, you could argue that your credit score is the first thing that the lenders look at when they are going to give you the dosh.
If you're credit score is bumping around the 500/999 mark then it needs improving. Trying to get a 95% mortgage with a lender and a score of half marks is not going to cut it.
Here are 3 simple steps that will start to improve your score
Electoral Roll
Whether you want to vote or not is not the question! You need to improve your credit report. Lenders like to see that you are on the electoral roll. It gives them an idea of permanance in terms of your address history. Moving about here there and everywhere is not a good sign. Better to stay put and get on the register
Utilisation
Credit card companies give you a credit limit. Do not under any circumstances max out the credit card because this is going to have an adverse effect on your debt to income ratio. This is another algorithm that the lenders look at when deciding on your mortgage application. Ideally if you can utilise between 30% - 50% of the credit card limit then this is going to help the credit score
Pay the credit card
Let's have a think about this one. The lender is going to give you thousands of pounds and expects that you will pay this on a monthly basis for 25 years. If they see that you can't even repay a couple of thousand pounds without stringing it out over months then this is going to bring up all sorts of red flags. You need to improve your credit score. If you can make sure that you repay the credit card in full each month, this will demonstrate that you are living within your means and are prudent with money.
If you have concerns about your credit history and want to have a chat to see how this will affect your mortgage application then give me us a call.
Call Johnny - Start packing!
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