We would always advise that our customers, new or existing, especially first time buyers in Lincoln, make sure that they are aware of the importance of making sure your credit score is looking good.With a higher score, you are likely to have a much better chance of achieving mortgage success.
That being said, it’s also important to remember that mortgage lenders have internal credit scoring systems. Just because you feel like your score is in a good position, you may still not meet the criteria for a set mortgage lender.
This is where a mortgage advisor in Lincoln comes in, as it is their job to match you up with the appropriate mortgage lender that has the best deal for you and offers the best chance of you obtaining a mortgage.
There are a lot of different several credit reference agencies in the UK, with the main ones being Experian and Equifax. It’s a good idea to review a few of these agencies in advance, so that you understand your financial position better.
In addition to this, it’s also good if one of them holds inaccurate information of you, as cross-referencing can alert you to these, so that you can rectify any mistakes.
Whilst it is good to check, it’s also important to note that taking out too many credit searches can also have a negative affect on your credit score. Price comparison websites are definitely credit searching culprits, known to conduct these on users.
If you have any plans to take out a mortgage, it may be worth waiting and applying for any further credit until your mortgage has been taken out. Whilst having and paying back credit can help your credit score, mortgage lenders would much prefer to see you in control of your finances.
Make sure that you are still on the electoral roll or that your information is correct, as this impacts your credit score also. It implies stability, which will work in your favour.
You want to make sure your name is always spelt correctly and that your current address is correct. If you aren’t registered yet, it is really straightforward for you to do this online.
Maxing out your credit cards every month will see your credit score being negatively affected. It is much more preferred if you use it to keep on top of your monthly payments and also make sure you pay it off.
Doing this is a good indicator of your mortgage lender that you are good at controlling your money. The main red flag in a mortgage lenders eyes is if you go above an agreed card limit or overdraft.
Similarly to the electoral roll point, you might also notice on your credit report that it looks like you are living in two different addresses, due to perhaps some incorrect details you have online somewhere. This can have a negative affect also.
It is very important to make sure these are correct, as not to put off a mortgage lender. If you have previously lived in a flat, this can get a little complicated as addresses may be formatted differently.
If you have any store or credit cards that you are no longer using, it is recommended that you contact the providers and close these accounts, to provide you with additional security.
Short term this may look questionable to a mortgage lender, as they won’t be able to see who closed the account, though in the long run, this will definitely be in your favour. It also reduces your risk of becoming a fraud victim with old cards and accounts.
If you are linked to any family members, ex-partners or friends financially, your credit score could be harmed without you realising, as you are tied to one another. One person having bad credit could mean your credit takes a hit.
You must contact the reference agencies to remove any financial ties if they have been closed, though they cannot be removed if an account is inactive. The sooner you can remove financial ties that aren’t necessary, the more beneficial it will be to you.
When you are looking to make a mortgage application, make sure that your credit score is in a good standing, to find the best chance of being accepted. Get in touch for specialist mortgage advice in Lincoln today and we’ll see how we can help you prepare for this, ahead of time.
Last edited 19/12/2022