The higher that your credit score is, the higher the likelihood of having a mortgage application accepted. There is never a guarantee on this though, as mortgage lenders have their own credit scoring systems, to determine who will be accepted for a mortgage.
If you happen to fail with one mortgage lenders credit scoring system, do not worry as there are a lot of different mortgage lenders out there, each with their own criteria. If you don’t match up with one, you may still match up with another.
It is the job of your expert mortgage advisor to make sure you are matched up with the right mortgage lender first time, if we can help it. Whether you are a first time buyer or enquiring for remortgage advice, you and your mortgage advisor both want the same thing, which is to find you the best deal.
There are many different credit reference agencies that you are able to use, with big ones including Experian and Equifax. We personally recommend CheckMyFile, as it collates an overview based on the information held by various big agencies, such as those mentioned.
You get a 30 day free trial, which can be cancelled at any time. After those 30 days have lapsed, if you haven’t cancelled, it will be £14.99 a month. We definitely do think it’s a great tool for looking at your credit score though!
Having multiple credit searches taken out against you can have a negative impact on your credit score. It is important to be careful when you are using things like price comparison websites, as they are usually the main culprits for credit searching an individual.
If you are definitely sure you want to look at applying for a mortgage soon, it may be wise to stay away from avoiding for other credit for the time being. Whilst having some credit to your name and paying it back can be helpful for your credit score, mortgage lenders won’t like to see increase borrowings.
Being on the electoral register will also work out quite well for your credit score, showing a mortgage lender that you have stability, which they will of course look upon favourably.
Make sure that your name is spelled correctly, that your address is correct and up to date, not at an old address. If you are not registered yet, it is fairly simple to sort out online.
If you max out your card each month that will reduce your score. Using a credit card and paying off the balance in full each month is preferable.
This indicates that you are good at managing your money. Worst of all would be exceeding an agreed card limit or overdraft. lenders want to know that you take your finances seriously.
Sometimes, if you have incorrect addresses on either the electoral register, a billing or a shopping account, it can seem to someone reading your credit report like you live in two places at once. This is usually an occurrence when someone forgets after moving house.
Make sure that all of your addresses are spelled right. Formatting for flats and apartments can be tricky, so you’ll need to make sure these read the same.
You should also get in touch with the providers of store or credit cards that you no longer use and close down the accounts. In the short term, this can have a negative effect on your score. as the credit reference can’t really tell if it’s you closing the account down or if it is the provider doing so.
Don’t worry though, it’s one step back to take two forward, as it will absolutely benefit you in the long run. This is also a good thing to do to reduce your chance of falling victim to fraud, should you not notice you have lost a card you don’t use regularly.
If you have a family member, friend or ex-partner connected to you financially, perhaps you had a joint contract or bill together, then this could be affecting your score.
You won’t be able to get the financial association removed if the account is still active, though if it isn’t you can get in touch with credit reference agencies and request they remove the financial links you have, as if their credit history is poor, your credit score can be affected.
Many consumers feel credit scoring is an unfair way of mortgage lenders assessing your mortgage applications. Of course the mortgage lenders feel differently about this, as it works out much cheaper and gives more consistent outcomes to minimise their risk.
Send an up to date copy of your credit report to your mortgage advisor upfront and you will increase your chances of being accepted first time. The more your trusted and experienced mortgage advisor knows about your finances, the better they can look to help you.
Last Edited 27/01/2023