5 simple tips to improve your credit score
Posted on 21st January 2022 at 10:31
Improving your credit score can have a huge impact on your chances of being approved for a mortgage, so heres our tips to help improve your credit score
A good credit score can help you secure the most competitive interest rate by passing the internal scoring system of the lenders offering the best rates. Your credit file should be as clean and accurate as possible to help you improve your chances of securing a mortgage. Your credit score is made up of many factors such as credit usage and informaiton held about you. Here are a few simple tips to help you improve your credit score:
Prove where you live
Make sure you register for the electoral (register to vote at your current home) The only way lenders know where you live is by checking the electoral roll. So if you aren’t on it or are registered at the correct address, it’s like you don’t exist!
Build a credit history
Using credit will build a credit score and a credit history. By having credit and using it responsibly helps build your score and helps to show lenders that you have borrowed money in the past and have done so responsibly which gives them the confidence you will continue to do so with the money they lend you. If you have never used credit, it can be hard for lenders to assess you.
Make your payments on time
This again shows lenders that you can use credit and pay it back responsibly, building confidence that you can handle a larger debt – like a mortgage. Using credit little and often can be a good way to increase your score, showing you aren’t reliant on credit and pay It back as soon as possible.
Keep credit utilisation below 50%
This is the percentage of your credit limit that you use regularly. For example, if you have a credit card limit of £1000, stay under £500 at all times. This shows lenders you aren’t maxing out your credit cards and aren’t too heavily reliant on them.
Check your credit report for errors or fraud
Small mistakes such as typos, incorrect date of birth or address can cause your credit score to drop and a mortgage application to be declined. If you notice incorrect information or fraudulent activity you can contact the provider to have this rectified or removed.
Prior for applying for a mortgage we recommend you run a credit report for free on Experian or Equifax to check your score and to make sure all information is correct. Doing this before your application gives you time to rectify any errors or carry out any of the points above to strengthen your score in time.
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