Subbie Tip #3 – Tips For Managing Your Credit Score

Mortgage lenders have complex decision-making systems that take a range of factors into account and although they don’t publish a list of the criteria, we know that one of the most crucial elements is your credit score. 

Some people think that never having had credit is a good thing but when it comes to getting a mortgage, the opposite is true – lenders want to see that you have a history of good financial management, particularly when it comes to loans and credit.  Today we’re going to look at four things you can do to make sure that potential lenders can see your history and that it demonstrates that you are a good risk!

First: if you are eligible to vote then make sure you have registered on the Electoral Roll linked to your current address; this is seen as a massive positive, but you’d be surprised how many people overlook doing it.

Second: if you’ve never had a credit card, now is the time to get one!  I’m not advocating building up debts here, merely that spending money on a credit card each month and paying off the balance before the due date will help build you a positive credit score.  If you’re finding it hard to get one or have been declined by card companies try applying to Capital One or Vanquis.  Both are more sympathetic to people with low credit scores and even though their interest rates may be a little higher, if you make sure you settle in full each month no interest will be payable, and you’ll be on your way to building a positive credit score.

Third: Don’t use pay as you go mobile phone tariffs.  Having a mobile phone contract, even for a SIM-only deal, is another great way to build up a credit history; every payment you make will be recorded on credit-bureau data and will be visible to potential lenders.

Fourth: Make sure your name appears on your household bills.  All too often I come across situations where partners are living together and contributing to costs but only one person is named on household utility bills.  Where the person paying the bills is building a credit profile, the other person, whether contributing to payments or not, however, is receiving no benefit when it comes to evidencing a good credit score to potential lenders.  The exception would be Council Tax Bills – these are not seen as a credit arrangement in the way that utility bills are, so do not contribute to the content seen on credit reports.

These steps will all help to build and demonstrate a credit history and score.  It goes without saying though that any credit agreements you commit to must be serviced when due and minimum payments met in full.  Failure to do so will still build your credit history but not in a positive way and may impact negatively on your ability to obtain future finance or a mortgage.

For more help with your credit score or securing a mortgage; call me on 08000 306705 or drop me an email to:  david@cismortgage.co.uk

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE