When it comes to the time of applying for a mortgage, a big factor is the credit score. If your score is high, then you have a better chance of being successful with your application. Although acceptance isn’t guaranteed, as Lenders go by their own internal scoring systems.
Each Lender and their individual criteria which has been specifically developed over the years. If you’ve failed with one Lender, it will be fine as there will be more Lenders who will be more accepting. It is the responsibility of your Mortgage Advisor to match you with the right Lender. They’re after the exact same thing as you are – to get you the best available deal.
The number of credit reference agencies within the UK is varied, including Experian and Equifax. It would be beneficial for you to look into many of these agencies as possible beforehand so as to get a more specific idea of your credit score. By doing this, you are also safeguarding yourself for if any of these credit reference agencies hold any incorrect information.
To get prepared there are some ways you can improve your credit score:
By carrying out multiple credit searches, you can jeopardise your score. Make sure to try and use authentic price comparison websites as some are major culprits of credit searching individuals. If you are applying for a mortgage sometime in the near future, it may be wise to apply for more credit later. It is correct that borrowing credit and paying it back later works out in the long run, Lenders don’t want to see this right before you apply for a Mortgage application.
Updating your address and enlisting yourself onto the electoral roll increases your credit score drastically. It shows stability and a good sense of organisation which Lenders like. Be sure that all information you provide is correct such as your name and your current address. If you aren’t registered, you can do it easily online.
It would be advisable to make sure you don’t max out your credit each month, as this will reduce your score. The most preferred method to keep up with your payments each month. This will be a way to get into the Lenders good books as it shows you’re able to manage your money. The main deterrence in a Lenders eyes is if you exceed an agreed card limit or overdraft. The reason Lenders watch over this is because they want to know you’re taking your finances responsibly.
It can sometimes appear that you’re living at two addresses at the same time if you haven’t updated your details with your providers. It is vital that the addresses that you’re details are correct. If you are living in a flat, this can be a bit more difficult as this will be formatted in different ways.
For extra security, it is safer to get into contact with providers of the credit cards which you don’t use, so you’re able to close the accounts. This may seem to have a detrimental effect at first as Lenders won’t be able to tell who closed the account .e.g. you or the provider. Though, the overall impact of this will work out in your favour. Furthermore, this reduces the risk of being a victim of fraud.
Having dependants such as family members or ex-partners connected to you financially could mean that they’re affecting your credit score unknowingly. If the financial association is still active then the account will still remain active. To remove the active links between you and another person you should contact the reference agencies and make a request. The faster you do this, the more beneficial it will be.
Many consumers feel that credit scoring is an unfair way of applications being assessed, though Lenders themselves feel this is the way that makes their job easier. It is more cost-effective for them to operate this way and computers give more consistent outcomes. However, some lenders do still do it the old-fashioned way but still apply the same rules about the number of defaults and CCJ’s they will allow.
When setting up your application, be sure your report is up to date to increase your chances of being accepted first time. The more in-depth information which your Mortgage Advisor in York has at hand, the better.