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How to improve your credit rating before getting a mortgage

Posted on Monday, September 20, 2021

How to improve your credit rating before getting a mortgage

1. See your credit report

The best way to understand your credit report is to see it for yourself. You can request your report from three agencies: Experian, Equifax and TransUnion.

Your credit checks aren’t recorded and only you and the credit reference agency will know about it. The checks are all done online and are quick and simple to do.


2. Make sure the information is correct 

The most important thing to check on your credit report is that all the information is correct and up to date. Make sure all your accounts and credit cards are listed. If any of these details look wrong, contact the credit referencing agency to correct this.


3. Check any financial links to other people

Many people don’t know that opening a joint account with another person means that their credit score can have an influence on yours. Make sure you aren’t financially connected to anyone you shouldn’t be.


4. Register to vote

If you’re not already on the electoral roll, the simple act of registering to vote will improve your credit score. It takes minutes and you can do it online. Lenders will see this as a positive sign when you apply for credit because they can more easily confirm your identity.


5. Pay bills by direct debit

Missing a payment will leave a negative mark in your credit report, and it can push your credit score down. An easy way to avoid this is to make sure all your bills are paid by direct debit.


6. Prove you can manage debt

If you’ve never borrowed money, you may have a very low credit score because you haven’t proven that you can responsibly manage debt. If this is the case, you should apply for a credit card and make sure you repay the balance every month.


7. Reduce your use of credit

If you use a lot of credit, in the form of credit cards or overdrafts, it can be considered a sign that you don’t manage your money well or that you’re living beyond your means. This will make you less appealing as a mortgage applicant.


8. Close any unused accounts

Closing any unused bank accounts can help improve your credit score. If you have multiple credit cards, you should look at consolidating the debt into just one.


9. Be careful about applying for credit

Every time you apply for credit – whether that’s a credit card, a mobile phone contract, or you want to pay monthly for your car insurance, the company will search your credit report before making a decision. They will do what’s known as a hard search, which means the search is recorded on your file.


10. Try free credit score coaching

Clearscore offers free coaching to help you improve your credit score. It’s all done via the app and gives you a list of tasks to complete.


11. Be patient

It takes time to build a good credit history, save a sufficiently large deposit and earn enough to take on repayments and running costs that come with owning your own home.


When you’re ready to apply for a mortgage, contact Quality Estate Agents on 01782 769122 and we can give you free advice from our mortgage broker that will be able to help you find the best mortgage with your improved credit score.