How to boost your Credit Score UK Rating Unless you are in massive debt and have poor credit history there are simple ways in which you can enhance your credit score and tidy up your credit file.
â€˘ Lenders use a rather bewildering number of measures to create a borrowerâ€™s credit score, however, the three main credit reference agencies in the UK supply lenders with data on all your borrowing and lenders largely base their decisions on these credit reports. You can take out a credit report on yourself - it only costs ÂŁ2.00 and can be done online - and see what information is currently held on your file.
Tidying up your credit file Lenders trying to assess what kind of borrower you are going to be are looking for consistency, dependability and low risk factors. • Correct all address errors on your file - all your accounts should show your present address. • Add your landline number rather than your mobile number to lenders’ accounts and al loan applications. It adds to the “stable” picture you are trying to create. • If you are applying for credit, use the same personal information on all applications and don’t deviate from this. • Don’t apply for too many things all at once. Space your applications over a period of time, as too many loan applications make you look desperate and in need of urgent funds. • Close any unused credit or store cards and bank accounts. Not only do they increase the risk of you being defrauded, they also muddy the waters and lenders may think you already have too many open credit lines. • Ensure you are registered on the electoral roll. Without it, you can kiss your loan application goodbye as it’s unlikely you’ll find a lender anywhere who’ll be prepared to lend you money.
How your Credit Score UK Rating affects your Mortgage Application â€˘ When you apply for a mortgage your chosen lender will use a number of methods to determine if a loan should be granted to you. Although lenders rely very much on credit reports which they receive from credit reference agencies, banks and building societies also have their own inhouse methods to measure a borrowerâ€™s creditworthiness and affordability of the mortgage for a particular borrower.
What is a credit score? •
Your credit history, meaning the payments you make against any kind of credit - be it credit cards, personal loans, mortgages or the monthly mobile phone contract you hold - determines largely what your credit score will be. In addition, the length you have been with an employer, home ownership and your monthly income also attribute to your credit score UK rating, albeit less directly. • An excellent or good credit score means you are creditworthy and responsible. An uneven credit history or poor credit score means you’re not likely to get accepted for a mortgage in the current climate of strict lending criteria. • Credit reference agencies use information from public records, such as the electoral roll or county court judgements, to confirm your personal data. They also obtain details from credit card providers and other financial institutions to build up a picture of what type of borrower you are. Your credit report will show all outstanding loans you currently hold and whether or not you have missed any loan repayments.
I was a bit late paying my credit card bill last month.Will my lender turn down my mortgage application? •
Although regular late payments for loans will eventually adversely affect your credit score, being late just the once because you had to rush your aged parent off to hospital and forgot to pay your credit card bill for a couple of days won’t put a dent into your perfect credit score or create a picture in your mortgage lender’s mind that you are irresponsible as a borrower. • Your mortgage lender will take into account how long you have been with your employer and what chances you have of being promoted to a better paid position as well as your savings for the required deposit, home survey and legal expenses; they will also look at your monthly outgoings and spending habits, before making a decision, whether to grant a home loan or not. http://creditreport24.co.uk
Published on Aug 1, 2013