The higher your credit score, the more chance you have of your mortgage application will be accepted. However, Lenders have their internal scoring systems so no one is guaranteed to get accepted.
Each Lender has its own system of scoring over the years. Do not worry if you fail with one Lender. Other mortgage lenders may be more forgiving. It is your Mortgage Advisor’s in Leeds job to match you to the right Lender, hopefully, the first time, but this is not an exact science. Both you and your Mortgage Advisor in Leeds want the same thing, which is that you end up with the best deal available to you.
There are several different credit reference agencies in the UK, including Experian and Equifax. It is a good idea to check as many of these agencies as possible to get a rounded picture of your credit score. Also, one of the agencies may be holding incorrect data. Checking with several agencies will help you identify any such discrepancies.
Multiple credit searches can harm your score. Be careful when using price comparison websites, which are significant culprits of credit searching on individuals. If you know you want to apply for a mortgage soon, it is wise to avoid using it for any other credit.
While having some credit and paying it back is a good thing for your score, in the long run, Lenders do not like to see you increasing your borrowings just before making a mortgage application.
Being on the electoral roll adds many points to your score. It indicates stability and Lenders like that. Ensure your name gets spelled correctly and that it’s your current address is registered and not an old one. If not, it’s easy to do so online.
If you max out your card each month, that will reduce your score. Using a credit card and paying off the balance in full each month is preferable. It is indicating that you are good at managing your money. Worst of all would be exceeding an agreed card limit or overdraft. Lenders want to know that you take your finances seriously.
Quite often, it can appear that you are living in two places at the same time on your credit report. Because you may have forgotten to tell one of your credit providers that you have moved to a new house, check all addresses spelled correctly. If you have lived in a flat, this can be tricky as the flat/apartment number can get formatted in different ways.
You should contact the providers of store/credit cards you no longer use and get the account closed. In the short term, this can harm your score briefly as the credit reference cannot tell if it’s you are closing the account down or the provider. Do not worry, though, and it is one step back to take two forward.
Which is a good thing to do to reduce your chance of falling victim for fraud should you not notice you have lost a card you do not use regularly.
If you have a family member or ex-partner connected to you, then this could be affecting your score. You will not be able to get the financial association removed if the account is still live; however, to remove one of these links, you should contact the credit reference agencies and make a request.
Many consumers feel that credit scoring is an unfair way of Lenders assessing applications. Lenders feel differently. It is much cheaper for them to operate this way, and computers give out more consistent outcomes.
Send an up to date copy of your credit report to your Mortgage Advisor in Leeds upfront, and you will increase your chances of being accepted the first time. The more your Advisor knows about your finances, the better. Also, there are still some smaller Lenders out there that do not credit score. These Lenders do it the old-fashioned manual way, although they will always have specific rules about the number of defaults and CCJ’s they will allow.
Whether you are a First-Time Buyer in Leeds, Moving Home in Leeds or Self-Employed in Leeds, we think that you would benefit from our Fantastic Mortgage Advice Service in Leeds