So you’ve fallen in love with that house on the canal, but your credit score is giving you the side-eye? Improving your credit score can increase your chances of securing a favourable mortgage deal and being able to move from scrolling Rightmove to viewing houses and making an offer.
Here are 5 tips for improving your credit score before applying for a mortgage…
Check your credit report
Sounds obvious but reviewing your credit report will help you understand your risk profile from a lender’s perspective. It’s time to dust it off and give it a good once-over to get to grips with your history and current position. You may also be able to spot errors that are negatively impacting your score and correct them.
Register on the electoral roll
Being registered to vote isn’t only about voting for your favourite local MP but it’s also the golden ticket to boosting your credit score. It provides an additional identity and address check for lenders. So, sign up and marvel over your newfound sense of civic duty.
Pay bills on time
Ah, the joys of paying bills – said no-one ever. But paying your bills on time is like throwing a party for your credit score. Late or missed payments will bring your score down. Setting up your regular bill payments as direct debits can ease the admin load, and who can’t all use a bit more time back each month?
Reduce debt
Debt is the big bad wolf of credit scores. Pay down those pesky debts, starting with high-interest credit cards. Avoid going into regular overdraft and stay away from payday loans - these are like financial quicksand and can signal financial instability to lenders.
Close unused accounts
Lastly, let’s talk about spring cleaning, credit style. Open credit, even if not in use, impacts your credit utilisation ratio and makes you higher risk for further lending. It’s time to say goodbye and close old credit and store cards – it will make it harder to rack up unnecessary debt too.
With some responsible financial habits and a splash of consistency, you’ll be walking into your next mortgage offer with a shining report! Good luck with your credit score makeover.