How to check and improve your credit rating

Posted on 23rd July 2018

Building a good credit score is vital if you plan on accessing or borrowing money through credit cards, loans or even something as simple as a mobile phone contract. The entire idea of credit scoring can be very confusing but is especially important if you are applying for a mortgage!

The decision to take out a mortgage is, for most people, the largest financial commitment they will make in their lives. With the bewildering range of mortgage products available, made more complicated considering the current testing economic conditions, it can be difficult without the benefit of sound financial advice, to find the most suitable mortgage for you.

Being part of one of the largest mortgage networks in the UK, we are not tied to any one lender.We have access to a wide panel of lenders and to deals not currently on the high street. You can find out more information or book a mortgage appointment here. (Link: https://www.venturepropertiesuk.com/mortgages/ )

What is a credit score?

Your credit score refers to a number which represents the risk a lender takes when you borrow money. The better it is, the more offers you’ll have access to. A bad credit score may mean less offers or less ideal terms (such as higher interest rates on credit cards).

The main credit reference agencies in the UK are:

• Equifax (Link:https://www.equifax.co.uk/)
• Experian (Link: https://www.experian.co.uk/)
• Callcredit (Link: https://www.callcredit.co.uk/)

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How to improve your credit score

 

Register on the electoral roll

Getting yourself on the electoral roll enables a lender to determine that you are who you say you are. It is important that lenders can confirm your identity and avoid issues with fraud and identity theft. The more information they have about you, the more confident they will be in giving you credit.

Pay bills on time

Aim to eliminate any outstanding debt before applying for new credit. Lenders might be hesitant to lendto you if you have existing debt.Paying off more than the minimum monthly amountalso expresses responsible management of money, and lenders take this into account.

Get a credit card

It might sound silly that getting into ‘debt’ can help your credit rating but having little or no credit history can make it difficult for companies to assess you.

If you can show past behaviour of managing money responsibly (i.e. using a credit card) then you then build up a credit history, and a lender can assess you properly. Making a couple of payments on the card each month and clearing the balance in full will help with this.

Keep your details up to date

It is vital that you ensure all your debts are registered to the correct name and details before applying for credit. Close any credit cards, direct debits or contracts that are no longer in use by contacting the provider – not just cutting up the card.

It’s worth checking who you are linked tofinancially, as their credit score will influence yours. When you take out a joint mortgage or bank account, you become financially linked – if you have split from your partner or the joint account is no longer between you both then inform the credit agencies of this.

Moving home a lot

Lenders like to see stability in the files of potential borrowers. This means living in the same place for a long period of time, having long-term employment history and even a long-term record with the same bank are all positive in their eyes.

Don’t shop around

Credit agencies see how many times you make a credit search. Of course, the more searches seen to be made can make it less likely you’re going to be accepted. Instead, opt for spacing out your applications if possible.

We hope we’ve given you some insight into credit ratings. Do you have any tips we’ve missed? We’d love to hear them! Tweet us at @ventureprop and let us know.