Firstly, what is a credit score? A credit score is a numerical value that lenders use to calculate your affordability for a mortgage loan/any form of credit, etc. Although different lenders have their own unique credit scoring models, the credit score that you’ll have listed on your score will likely range from 300-800+.
A credit score below the ‘good’ range may mean that you’ll only be able to access specialist products, whereas, if you have a score that’s greater than ‘good’, it’s likely that you’ll be able to access more competitive products.
As an experienced mortgage broker in Leeds, we handle specialist cases every day. More than often we find that our customers have come to us after being declined by their bank/building society due to a low credit score or something similar. It’s our job to pick up where they left off on their mortgage journey and try to secure them a great mortgage deal.
There are many different reasons why you could have a low credit score. A common reason that we come across is that there is a county court judgement (also known as a CCJ) associated with the applicant’s name. You may receive a CCJ when you’ve taken a loan/borrowed money and have failed to pay off the amount owed. CCJ’s can put a harmful imprint on your credit file for 6 years or more, and that’s why it’s so important that you try and get the CCJ removed from your file prior to applying for a mortgage or make sure that you pay off all owed payments before you receive a CCJ. A CCJ will undoubtedly reflect negatively on your mortgage application and your lender will start asking questions.
Following on from CCJ’s, failing to stick to credit agreements can also harm your credit score. Even failing to keep up with your mobile phone contract payments can eventually cause damage to your credit file. You can’t forget about the little things either, as they can cause damage too. For example, dipping into your overdraft every month could cause a long term negative effect.
These are just a few examples of things that can negatively affect your credit score. Of course, there are lots of other reasons why you may have bad credit and some more obvious than others. It’s our job to try and help you improve your score and give you expert tips to try and get your credit file looking up to shape.
Improving your credit score, especially when it’s low, can sometimes be difficult. When it comes to helping you improve your credit score, we want to give you the best advice possible to help you do so.
You should know that each lender has their own unique passing criteria, so your score may affect what sort of deals you can access from each one. Also, you may not match every single mortgage product, so rather than applying for lots of different products, you could try shopping around for mortgage deals that will definitely match your situation and credit score.
You’ll have a soft or hard credit search performed on you every time that you go directly to a lender and their in-house mortgage advisor puts you through for a deal. This search will leave an imprint on your credit file and other lenders will be able to see the search. If your application is declined, the credit search on your file may have a negative impact on your credit file. This is why we recommend keeping the number of searches performed to a minimum.
This is where we can help! As an expert mortgage broker in Leeds, we aim to get it right the first time, which means that we will take a look at your credit score and only look for products with criteria that we know you’ll pass.
Applying for credit, particularly during your mortgage application, can sometimes backfire on you. If you take out a loan or apply for extra credit if you fail to pay it off before your application, your credit score may dip and it could reflect badly on your credit file.
In some cases, as long as you pay it off, borrowing credit can actually help improve your credit score. This is because you are showing that you are a reliable applicant that meets their payment deadlines.
An easy way to help improve your credit score is to get yourself registered onto the voter’s roll (if you aren’t already). Being on the voter’s roll shows that you are who you say you are and you live where you say that you live. It’s a simple registration process; head over to the official government’s electoral roll page to find out more.
Make sure that you fill out accurate information when registering for the roll. You will need to provide your current living address, so make sure that there isn’t an old one on their system.
During the mortgage application process, you should make sure that all of your information is filled out correctly, double-check that you’ve not got an old address listed anywhere!
Maxing out your credit card(s) each month can heavily impact your credit score, in a negative way. Of course, paying off your credit cards each month will help and may give your credit score a small boost.
If you are exceeding credit card limits and always dipping in and out of your overdraft, they may feel as if you don’t take your finances seriously and are an unreliable applicant.
Your credit score could be getting harmed without you even knowing if you are still financially linked to someone who has bad credit. Whether it’s an ex-partner or a family member, if they are harming your credit score, you should try and get your financial links removed from them. The only way to do this is to get in touch with your credit reference agencies and make a request.
At the end of the day, it’s up to your lender to decide whether they feel like you are the type of person that they want to be lending to. Some may be more lenient than others, whereas some may be strict and won’t give you some leeway.
Sometimes it’s best to get help from professionals like us. Using a mortgage broker in Leeds could allow you to access new, competitive mortgage products. Whether you’ve got bad credit or good credit, it’s our job to try and find you a product that you perfectly match. We have a huge panel of both high street and specialist lenders, each with 1000’s of mortgage deals for you to try and access.
For further credit score mortgage advice for first time buyers in Leeds and home movers in Leeds, feel free to get in touch today.