Across the nation we now find that people are paying a lot more attention to their credit rating they might have done in previous years. We find that a large majority of the people who call us for mortgage advice in Leeds perhaps have already researched online to find a copy of their credit report.
There are a wide variety of different credit reference agencies to choose from, but the two most common companies you may be aware of are Experian or Equifax.
We would highly recommend that new customers who get in touch look to use Check My File. In doing so, you’ll find a report that offers customers a collation of information from various sources (the aforementioned two included) in an easy to understandable colour-coded report.
Check My File offers a 30-day free trial. After this 30 days, you will be charged £14.99 a month, although you can cancel this at any time prior to the end of those 30 days.
When speaking with our customers, our mortgage advisors are often asked if they will be doing a credit search on them, as they have done their research and know that too many searches can negatively affect their credit score.
The lender will always run their own credit checks but our mortgage advisors will always ask the customer for permission before doing so. You’ll find that credit searches will come in two forms; hard searches and soft searches. Here we will discuss the difference between the two and how they can help.
A hard credit search is a way to take an in-depth look at your credit report. No matter who they are, any financial institution carrying out one of these will have to seek your permission to do undertake one of these.
The main advantage of a “hard” search would be how in-depth it actually goes. The chances are, if you can pass a hard credit check, it is likely that you will go on to be successful with a mortgage (though this is of course never a guarantee).
From this point on, all that can go wrong with your mortgage process is if for some reason you cannot provide the required documentation to backup the information that you have presented to the lender, or it turns out you have provided incorrect information altogether.
Looking at it from the other hand, another benefit is that having a hard search taken out on you will leave a ‘footprint’ on your credit file, which would mean that anyone taking a look at your report can see that it has been carried out.
This is not a bad thing at all, but let’s say that for some had multiple searches included in your credit file in a short period of time. This could come across to the mortgage lender that you are applying for a lots of credit at the same time and this may put them off.
The footprint will not leave a note as to whether or not your application was successful, so if you have several searches in a short amount of time, the lenders’ systems may assume wrongly that you are being declined regularly. Think about it; why would you apply for credit with a second lender, unless you’d been declined by the first?
Having the occasional hard footprint on your record isn’t too big of an issue, so you really don’t need to worry about it too much. Just be careful not to have too many of these taken out
The alternative to the hard search, would be a soft credit search. This would be a much straightforward search which takes a look at your financial situation and would be the type of search that you might come across when using a price comparison website, so that you can find out what options may be available to you.
Alternatively it can be used to verify your identity. You’ll find that some mortgage lenders will carry out soft searches of their own. We find that nowadays, even more lenders are changing to this type of credit search.
Whilst it will give whoever is carrying out a soft search less information than they would’ve gotten from a hard search, if you managed to obtain an Agreement in Principle from a lender, it is still a very good indicator that your full application will be accepted for a mortgage.
One of the things that appeals to customers regarding soft searches is that you have the ability to see soft searches that others have carried out on you (people are often surprised by how many have been carried out on them), though these searches will not be visible to other financial institutions such as a bank or lender.
This means that you have the ability to apply for an Agreement in Principle ahead of a mortgage in Leeds, without causing any damage to your credit score, regardless of whether it is successful or not.
If you are thinking of making any offers on a property as a first-time buyer in Leeds, our trusted and dedicated mortgage advisors in Leeds would very much suggest that you obtain a mortgage Agreement in Principle in place prior to getting in touch with an estate agent.
You should ideally look to give yourself the best possible chance of securing your dream property at the lowest possible price. With this in mind, if you present yourselves as having your finances in order, you will definitely give yourself the upper hand in your mortgage situation.
Being in possession of an Agreement in Principle could also help prevent an estate agent from trying to cross-sell any of their own mortgage products to you.