According to research from the Mortgage Advice Bureau, two-thirds of those looking for a new home don’t know their current credit score or even how to find out what it is. Being aware of your current credit score is essential when buying your first property or looking to move up the ladder. It allows buyers to know whether their mortgage application will be accepted.
The research also highlights that those who are most likely to be first-time buyers (25-34 years old) are often affected by a low credit score when applying for a mortgage, while consumers over 55 are the least likely to know what actions to take to improve their credit score.
A buyer’s credit score is one of the most important factors when applying for a mortgage, and alongside income often determines whether a buyer is eligible for the mortgage or not. Therefore, the Mortgage Advice Bureau has prepared some tips on how to take control of your credit score:
- Start by checking your credit score
There’s an array of companies on the market that run thorough credit checks which help potential buyers understand their current financial situation.
- Be prepared to show your account history
Ensuring your account history proves good financial management strengthens a mortgage application and helps when discussing mortgage options.
- Register on the electoral roll
Registering on the electoral roll is the most credible way to prove your address. A lot of lenders use the electoral roll as the most credible source of proof of who the potential buyer is.
- Be responsible with your credit cards
Having a reasonable amount of available credit aids in proving good money management. It is also important to not withdraw cash from a credit card, as it can look as if there is nothing left in the normal bank account.
- Never miss repayments
Being able to stick to a repayment schedule is a crucial element of keeping a good credit score! Missing repayments can severely impact the chances of a successful mortgage application.
- Don’t try to fix bad credit with applying for more credit
If you are aware your credit score isn’t credit, stop using your credit card immediately – applying for more credit to fix the issue can be detrimental to a potential mortgage application as it shows you cannot be trusted to repay what you owe.
- Always dispose of unused cards
We are all guilty of hoarding unused cards in our wallets. When those happen to be credit cards, lenders can often be misled as to how much available credit you have. When a card is no longer in use, dispose of it safely to ensure this doesn’t happen!
For more credit score tips please visit the Mortgage Advice Bureau website or speak to one of our experienced sales advisors who are their to support you every step of the way towards your dream home. For more information on how Harron Homes can help you purchase your forever home, please visit our Purchasing Assistance site.