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8 Tips to Improve Your Credit Score for Mortgage

Firstly you’ll need to get a credit card if you haven’t already and start using it as this will demonstrate to lenders that you can handle and manage credit. Another way lenders like to know if you’re a responsible borrower is by checking that you are not overusing your credit card, ensuring you keep a reasonable level of credit card limit utilization.

Check your credit report frequently you can use a £2 statutory credit report, apply for a monthly report, or use a free service such as Clear Score, this will tell you all the information you need to know about your credit history and what lenders are likely to think of. Registering on the electoral roll will tell lenders will also make you more trustworthy to lenders as it confirms that you live at the address stated.

Keep your credit applications limited as applying for too many accounts will have a deferential effect on your credit score, this is even true for current accounts. Many credit providers provide an eligibility check before applying, use this before applying as it will show how likely you are to get credit without leaving a mark on your credit history.

If any bills are not in your name that should be in your name change the name over to yourself as paying bills on time will improve your credit history. Finally, be financially responsible make sure you don’t get in over your head in debt, and live within your means.

8 Tips for a Better Credit Score

Here we define the best eight tips for a better credit score:

1. Get a Credit Card and Use It

If you don’t have a credit card then you need to get one immediately. Using credit regularly and making repayments on time will build your credit history over time. Keep your credit card active and aim to repay the card via a direct debit. This can also show mortgage lenders that you’re financially responsible and can be relied on to pay money back that you’ve borrowed.

2. Don’t Overuse Your Credit

Using credit is fine and you need to use credit to build up a positive credit history. The key here is to not overuse your credit facilities. If you can use £1000 of credit a month, try not to go over 50% of that limit. This shows mortgage lenders that although you could have used additional credit, you didn’t need to. Again, this creates credibility for lenders.

3. Check Your Credit Report

You can download free copies of your credit report online from sites such as Experian and Equifax. It’s important to get a copy of your report so you can check that the information is accurate and up to date. When you apply for a mortgage, lenders will cross reference your information and if things don’t match, then it can cause problems.

4. Register on the Electoral Roll

Making sure you’re on the electoral register can make your mortgage application run smoother. It’s also a great way to get credit in other financial areas such as credit cards and loans. Being registered on the electoral roll gives lenders more security as they can check your registered address. It’s easy to do and can be done online in a matter of minutes.

5. Keep your Credit Applications Limited

Don’t go over the top with credit applications. It’s good to take a little credit and repay it but multiple credit applications can have a negative impact. Multiple credit applications in a short amount of time can result in ‘hard footprints’. Hard footprints are left each time you apply for credit and can lower your credit score. If you are rejected for credit, don’t be quick to apply again. Let some time pass before reapplying to try and minimize the chances of your credit score taking a hit.

6. Get an Eligibility Check

Checking to see if you’re eligible is a more sensible approach to credit. This is because an eligibility check doesn’t result in a ‘hard footprint’ and will only leave a ‘soft footprint’ which has less of an impact on credit score. Eligibility checks can be great as they’ll show you if you’re likely to be approved or not. Mortgage advisors can also check your circumstances to see if you may be eligible with certain lenders. This often results in a mortgage agreement in principle.

Also Read: Why You Need a Good Credit Score?

7. Are Bills in Your Name?

If you haven’t yet got any bills in your name, then get some transferred over. Examples of bills could be household utility bills or council tax and mobile phone bills. The reason to get bills in your name is because it creates a record of paid payments and creates history. Making payments on time shows mortgage lenders that you’re financially responsible.

8. Be Financially Responsible

Paying your bills on time and repaying your creditors is probably obvious, but it had to be part of this list. If you miss payments or make late payments, then it will hurt your credit score. It’s highly advised to set up standing orders and direct debits where possible. This not only pays your bills on time but can make your financial life a lot easier.

Ajeet Sharma, the founder of Financegab and a well-known name in the field of financial blogging. Blogging since 2017, he has the expertise and excellent knowledge about personal finance. Financegab is all about personal finance which aims to create awareness among people about personal finance and help them to make smart, well-informed financial decisions.



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