When preparing to apply for a mortgage, it’s a good idea to check your credit report to see how you look to potential lenders. Your credit score can have an impact on how much you can borrow, and the deals that will be available to you. Adverse credit reports, while they may not preventing you from getting a mortgage, could mean that you are offered less than you would like, or that you end up paying a higher interest rate. By cleaning up your score first, you will improve your chances of securing a better deal. Let’s take a look at the things you can when it comes to improving your credit score.
Reduce Your Credit Utilisation
One of the quickest steps to improving your credit score is to reduce your credit utilisation. This means reducing the percentage of what you are borrowing against your available credit limit. There are several ways you can achieve this:
- Pay off some of the balance in a lump sum
- Increase your monthly payments
- Spend less on credit cards
- Make more frequent payments
- Ask for a higher credit limit (makes the balance you owe a lesser percentage of the overall limit)
Check Your Credit Report
Have a good look through and check all of the information on your current report is correct and you can’t see any discrepancies. If there is something that looks incorrect, dispute it.
Become an Authorised User
If a member of your family has an excellent credit rating, ask them if you can become an authorised user on an older card with a high credit limit and nothing negative. This can provide quite a good bump in your credit score.
Remove Yourself as an Authorised User
If you are an authorised user on an account with negative history, it is worth asking to be removed. Get in touch with the credit bureau and ask them to remove you. As an authorised user, it is not your responsibility to pay the bill so you shouldn’t suffer the consequences of someone not paying on time.
Stop Spending, Start Repaying
Ask yourself if you really need that next purchase. Where can you make savings? How can you reduce your outgoings and apportion that money to paying off old balances, reducing current ones and paying off store cards etc. The more accounts you can settle, the healthier your report will look.
Write a Goodwill Letter
If you are always really good at making your monthly payments on time but had that one time when you forgot or were slightly late, you could consider writing a letter asking for a goodwill adjustment to the issuer. In the first instance, start with a phone call, to formalise the process, send a Goodwill Adjustment Letter. This is more effective before the negative mark actually hits your credit record but there is no harm in asking after.
Keep Track of Your Credit Score
Sometimes, things may happen that you are not aware of, only to be discovered when you make a credit application. Leave nothing to chance with your mortgage. Check your credit report regularly and monitor any changes.
If you are looking for the right mortgage deal, look no further, At Buzz Financial, our experienced and knowledgeable team of experts are here to help. Simply give us a call on 01934 756717 to discuss your requirements.