• Matt

How to get credit score ready before applying for a mortgage

A good credit score is a key component in lender decision making for mortgage applications. It not only serves as evidence that you can manage your money but demonstrates that you can keep up regular payments - a key requirement by lenders. But what score do you need to secure a mortgage?

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Unfortunately, it’s not as simple as saying a credit score of Y will get you a mortgage of Z. Most lenders have their own criteria for assessing mortgage applications. However, there are a few simple things you can control to ensure that you give yourself the best chance of getting the green light on your application.

DOWNLOAD YOUR FULL REPORT

It’s not all about your credit score but instead the detail that makes up your credit history. Lenders will look at this to see things like how much you owe on credit, if you’re registered to vote, if you’ve missed payments or have financial associations.

Whether you’re about to apply for a mortgage or just thinking about it, it‘s always worth downloading your full credit report to see what information is held on you. From there, you can dispute incorrect information, add a notice of correction or work on areas that may potentially raise a red flag to lenders (e.g. missed payments).


PAY YOUR BILLS ON TIME

This seems like an obvious one but this really is the most important component in your credit rating, demonstrating to potential lenders that you can be trusted to repay any sum of money you owe.

Missing any sort of payment can set you back. The key here is to get it paid off ASAP. The longer it’s been since the missed payment was rectified, the better. A notice of correction always helps to explain to lenders the reason behind the late payment. I’ve had clients where it was a simple case of funds being in the wrong account.


USE BUT DON’T ABUSE CREDIT

Strong credit is really a juggling act between spending, saving and paying back. Lenders want to see you using your credit wisely. Steer clear from having too many accounts, applications for new credit in a short space of time, or equally dormant credit such as credit cards you no longer use but are still open.


If you’re about to pull the trigger on your new mortgage application, DO NOT apply for any form of credit before the mortgage is offered as this will reduce your appeal to lenders... the 0% finance on that new Swyft sofa can wait.


REGISTER TO VOTE

Even if you don’t plan to vote, lenders have been known to decline an application where they can’t verify someone at their current address. Being present at your current address on the most recent electoral roll gives you a credit footprint and shows stability. It’s worth noting, it can take up to three months from registration to show on your credit report, so make sure you do it sooner rather than later if you’re planning to move.


CHECK FOR ERRORS

Everything from an old address, change of maiden to married name, or incorrect information - this all needs to be up to date and consistent for the best chance of your report showing all the information that lenders want to see.


UPDATE FINANCIAL ASSOCIATIONS

A financial association is created when you enter a credit agreement with someone i.e joint account, previous mortgage or current account with an overdraft and it will remain there until you ask for it to be removed. Meaning, a financial association doesn’t end just because a relationship does so always make sure this information is up to date.


WHERE CAN I DOWNLOAD MY FULL CREDIT REPORT?

There are many agencies offering access to a full credit report but a go to of ours is Checkmyfile.com. It’s a slightly different approach as it compiles data from four credit agencies as opposed to one which many others offer. This not only creates a more detailed report but helps your broker match you to lenders you have a better chance of getting accepted by.


It offers a free 30-day trial and you can cancel at anytime before being charged £14.99 per month.


You can download your full report HERE


So overall, your full credit report is a key indicator for meeting lender criteria. Getting a mortgage with poor credit is by no means impossible but the sooner you review any weak areas of your report and put a plan in place to fix them, the better position you will be in to secure lending.


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