How to improve your credit rating
When considering applying for a mortgage, it’s a good idea to start by checking your credit score. This enhances the chances of your application being accepted, and you may get a better offer as a result. Why is your credit score important? Because, in addition to determining your mortgage affordability and taking your deposit into account, lenders examine your credit rating to see how effectively you manage your finances. As a result, it is worthwhile to check it first and then try to improve it if necessary.
How to Examine Your Credit Score
You must contact the three major credit reference bureaus to obtain a copy of your credit report. Equifax, TransUnion, and Experian are the three companies. Each one will collect different information about you, therefore it’s critical to receive credit reports from all of them. The information gathered will include, for example, how quickly you pay your bills, whatever debts you have, whether you’re on the electoral roll, and whether you have a history of bankruptcy or CCJs.
What happens after you check your credit score?
You may have a low credit rating or none at all but don’t be disheartened by this. Your credit file is impacted in different ways by financial transactions. For example, you may have missed a payment for your mobile phone. This isn’t viewed as serious as missing a mortgage payment. Or you may have a low credit score despite never being in debt before. This could be for the simple reason that you hardly ever use credit so there’s little information to confirm your ability to manage your finances. Any adverse credit on your file will be deleted after 6 years but you should still try to improve your rating in the meantime. This shows lenders that you’re managing your finances better. They’ll be more likely to agree to a bad credit mortgage.