How to strengthen your credit rating ahead of a mortgage application

Ben Thompson, Deputy CEO at Mortgage Bureau Advice shares his insight to help boost your credit score and, put you in a better position to get a mortgage.

Related topics:  Finance,  mortgages,  credit rating,  application
Property | Reporter
3rd October 2023
advice
"If you know for a fact that you have bad credit, having multiple credit searches carried out in a short space of time can go against you. In the meantime, it’s advisable that you don’t apply for any more credit and concentrate on clearing your existing debt instead"
- Ben Thompson - Mortgage Advice Bureau

Credit scores can have a huge impact on your personal finances and borrowing potential, especially when it comes down to getting a mortgage.

If you were about to lend someone a large amount of money, then you’d want to know that they’re responsible, capable of paying it back, and aren’t hiding anything below the surface, right?

That’s why all lenders want to see that you have a good credit score, as this will help them decide whether to lend you money, how much to lend you, and even sometimes how much interest to charge.

With this in mind, there are a number of ways to prove you can manage your finances responsibly and are able to pay back what you borrow. If you have a good credit score, then you’ll stand a better chance of getting the mortgage deal you want and ultimately will be able to borrow the maximum amount to help you purchase your dream home.

Ben Thompson, Deputy CEO at Mortgage Advice Bureau, offers this advice to help boost your credit rating.

1. Check your credit score

The first place to start is to find out how good or bad your credit score is. There are various companies, i.e. Experian, Equifax, and Transunion, that can provide you with your credit score. checkmyfile.com is a good one to use, as it includes all these companies in one report.

This will be a thorough report of all your credit accounts, including outstanding loans and any missed or late payments over the last six years, as well as any other people who are financially linked to you. On occasion, the reports may contain inaccurate information, and if this is the case, you can get this put right before applying for a mortgage. Mortgage Advice Bureau’s website provides more tips on information to help understand your credit score.

2. Show an account history

Start by proving you have a good history when it comes to managing your finances. Having a history of bank accounts, e.g. a current account, savings accounts, ISAs, and a credit card, will give your mortgage adviser a decent credit history to look back through.

3. Declare your address

Lenders will need to see proof of your name and address to trust you are who you say you are. Register on the electoral roll, and make sure all of your bills and credit commitments are registered to your current address. This way, everything is easy to trace back to you and confirms your identity.

4. Don’t miss repayments

This may sound like an obvious one, but missing payments will have a detrimental effect on your credit score. Despite your hard efforts to do everything else, missing repayments shows that you are incapable of managing your finances and paying your bills on time – which isn’t great if you’re trying to get a mortgage.

5. If you have bad credit, stop applying for more credit

If you know for a fact that you have bad credit, having multiple credit searches carried out in a short space of time can go against you. In the meantime, it’s advisable that you don’t apply for any more credit and concentrate on clearing your existing debt instead.

6. Don’t keep unused cards

Holding on to credit cards you no longer use not only poses a fraud threat but can also be misleading as to how much available credit you have. Therefore, make sure you cancel any accounts you don’t use and cut up the card before throwing it away.

7. Speak to a mortgage adviser

If you’re concerned about your credit score and its impact looming over you when trying to pursue your homeownership goals, reach out and speak to a mortgage adviser. They can provide knowledgeable and personalised advice, helping you to consider ways to improve your credit score and identify the types of mortgages you could secure with your credit score.

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