Something that can't be avoided but unfortunately is often overlooked are credit reports and scores. We've seen many instances where an unexpected poor score has hindered an application so we want to try and make sure that you don't come up against those same hurdles.
Firstly, you need to get a copy of your current report. If you don't already have access to it, you can sign up for a free trial at; www.checkmyfile.co.uk.
A few tips on getting and keeping a good score are;
Set up Direct Debits for Credit Payments
Missed payments and defaults have a significant, negative impact on your score; setting up automatic payments will minimise the chances of either occurring.
Register on the ElectoralRoll
Proving where you live is a quick, simple way of improving your score. You can do this even if you’re living with parents. It is vital that you do this as lenders use this data for identity checks. You can register here: www.gov.uk/register-to-vote.
Don’t max out your Credit Cards
It works in your favour to have, and reliably use, forms of credit. However, your credit utilisation needs to remain reasonably low to be deemed favourable. If possible, try to keep your credit utilisation to 25% (i.e. if you have a limit of £1000, try to only use £250).
Check for Financial Associations and any other errors
We’ve known errors on credit reports to cause problems in obtaining mortgages. De-link yourself from any ex-partner that you applied for joint credit with in the past – any late payments or misdemeanour will impact your own credit score. If you find these early on then you’ll have a good chance at resolving these issues prior to any mortgage application.
Need Financial Planning Limited is an appointed representative of Invicta Financial Solutions which is authorised and regulated by Financial Conduct Authority.
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