Today I want to talk about credit and credit scoring. If you’re a first time buyer, I’ve got three tips that will help you up your credit score and get the mortgage you need. These are really simple things that are often over looked.
1. Get on the electoral roll
The first tip is to make sure that you’re on the electoral roll at your current address. Ideally you should not be at your parents address where you’ve been before, or an address when you were at University, or an address when you were working elsewhere.
You need to be at the current address.
Lender’s factor the electoral roll information into their credit scoring and you can gain quite a few points for being on the electoral roll. If you are not on the electoral roll you could actually put yourself at a disadvantage straight away. It’s really easy to get yourself on there. Here’s a link.
2. Generate some credit
The second tip is to build up some credit. If you’re not using credit yet, don’t be scared of using things like a credit card.
Of course, it’s vital that you be really sensible with it. What you want to do is show the lenders that you’ve been able to maintain a credit account. Simple things like buying the weekly shop on the credit card and then paying it off a few days later or at the end of the month (you don’t want to be accumulating any interest) will add to your credit score because you are demonstrating that you are reliably servicing your debts.
3. Make sure you’re up-to-date
The third tip is to make sure that all your credit accounts, if you do have them, are up to date.
It can be gutting to be so close to getting a mortgage only to have it denied because the last month you missed a couple of payments on a credit or store card. This does happen.
Don’t panic as there are some lenders that will be able to overcome these things. But, for the most part, if you’re not there yet make sure that your credit accounts are up together.
So those are my three tips – if you can do them all it will really give you a good basis from which your credit score could only get better!
That said, if these things don’t apply to you or if you have had some issue with credit, then there are things that can be done.
Ideally though you want to be looking as appealing as possible to the lenders. So that when that decision of principle goes in, they look at it and they think, “Yeah. Nailed it all. Happy with these clients. These are great clients”.
If you’d like to check your current credit score, I recommend you do so by clicking on this link
That gives you a 30 day trial to the credit report system that they run. Which takes credit information from the three main providers. So you see exactly what a lender will see, in terms of credit profile. So it allows us find out any problems at that stage.
We also have a handy guide that is specifically for first time buyers. It goes through all the steps that you need to take in order to make sure you get the result you need when you buy your property. We’ve even included a budget planner in there. Download it here.