For the vast majority of people looking to purchasing a house, a mortgage is going to be required. It may seem very straightforward to secure one once the right amount of deposit has been acquired, but it doesn’t always work out that way. If you are struggling with a poor credit score, it may affect your chances of mortgage approval. Here are some simple ideas on how to improve your credit score and increase your chances of having your mortgage approved.
Your credit score is a numerical way that a lender can judge your reliability when it comes to paying back money. For example, if you have purchased a new car on finance and have been on time with your repayments, you will have a good credit score. On the contrary, missing repayments or paying late will cause your credit score to be poor.
There are a few things you can do to help boost your credit rating over time. I should stress that it can be a gradual process and won’t change overnight. To improve your credit rating, try:
By spending less with your credit cards, you will not be borrowing as much from banks. This means you are less likely to be late with paying back the money you owe. Also, if you are not using your credit card as much, it shows the lender that you do not need to borrow money as much.
Debt can be crippling financially. It is important that you pay any debts off as soon as you can to help you get a good credit score. As your credit score doesn’t just get better over night, by paying off your debts, you are making the best possible start to improving that score to enhance your chances of having a mortgage approved.
Having more than one credit card account doesn’t look good to lenders, especially if there is money owed across a number of accounts. If you must use a credit card, you should choose one lender, and close all other accounts once you have paid them off. This way, it will be easier for you to manage your credit card usage, which may help you with tracking your outgoings to get on top of your finances.
Buying financed goods is another loan that will be looked at a mortgage lender and will subsequently have an effect on your credit score. Where possible, prevent yourself from purchasing goods on finance. All good things come to those who wait!
These are potential ways to help improve your credit rating. However, if your credit rating is incredibly poor, you may have to seek third party advice from specialists in credit rating. There are many non-profit companies that can give you advice on this subject.
If you would like any further information on who to speak to about purchasing a property or securing a mortgage, please don’t hesitate to contact us today.