Improve Your Credit Rating
The better the credit rating, the higher the chance of getting a better rate. Average or even poor credit ratings can greatly reduce choice of lender and impact on the rates.
Use Credit Cards Little & Often
Using credit on a regular basis and responsibly is key to building your score. Keeping your credit card active, by spending small amounts and paying your bill off each month, makes you appear more attractive to lenders and can help boost your score. This is because it shows you can reliably pay back any monies you borrow.
Keeping Credit Utilisation Low
Your credit utilisation is a percentage of the total credit limit you are using. It will have an impact on your credit score. Lenders see high credit utilisation as a sign you may be experiencing financial difficulties or you are relying on credit – so it is a strong indicator of lending risk. High credit utilisation can have a negative impact on your credit score and mean lenders might be reluctant to lend you money. A rough rule of thumb is to aim for no more than 50% of your available credit. This applies to 50% of each individual account and your total credit utilisation ratio.
Fix Mistakes on your Credit File
Your credit score is based on the information held in your credit report. If this information isn't accurate (e.g. an account appearing as 'open' when it is 'closed') then your credit score won't be either. This could mean your score is lower than it should be. By checking your credit report regularly, you can spot (and fix) any mistakes, which can help boost your credit score.
Electoral roll - Being Traceable
Getting on the electoral roll (also known as the electoral register) can help improve the way you're viewed by lenders, and boost your chances of getting accepted for credit. This is because credit reference agencies are able to verify who you are, which is one of the most important tips we can give to anyone applying for mortgage. Many people move house and forget to update the electrol register. If you are from England you can register online instantly. Register to vote here
Don’t Apply For Too Much Credit
Bear in mind that taking out a consolidation loan or a 0% balance transfer credit card, or applying for a higher limit on an existing credit card, will all involve a ‘hard search’ on your credit report. This can negatively affect your credit score, particularly if you have applied for several products within a short space of time. Why not check your credit report before you book an appointment.
We have a team of advisers so you can be sure there will be one on hand to you to give you the right advice. We can check your eligibility against the lenders’ criteria to maximise your chances of a smooth application process. Whether you’re a first time buyer, moving home or simply looking for the best re-mortgage deal, we have access to an unrestricted range of lenders that can unlock the door to 1000’s of mortgage deals from local and national lenders alike.
Looking After Your Bills
Forgetting to pay bills can damage your credit score as it suggests to lenders that you struggle to manage your credit. This can be easily avoided, if you set up Direct Debit's for your utilities and other bills, ensuring credit card payments are set up to make at least the minimum monthly payment. This one easy step could help enhance your credit score. Utility bills such as gas, electric and phone bills are all an active form of credit. They show lenders that you can manage your bills reliably, if they are paid on time of course! However if you are co-habiting and all of the bills are in one name only, it may be worth considering putting some of these utilities in the other person’s name. That way it gives a lender a picture of you both and should help with your respective credit scores.
Fraud - Be Vigilant!
Identity fraud is becoming an increasing problem. If you fall victim, this could potentially damage your credit score, as you may become responsible for the credit actions of someone else. Checking your credit report regularly will help you spot the signs of financial crime.
As soon as you believe you are a victim of financial fraud, you can take the necessary steps to resolve this and repair your credit file. Visit Action Fraud for information on reporting, spotting and preventing fraudulent activity.