Jamie Lennox - Mortgage Adviser - Dimora Marketing

5 ways to improve your credit rating if you want to get a mortgage

5 ways to improve your credit rating

Maintaining a good credit score is crucial in the UK if you want to get a mortgage with a high-street lender. A high credit score shows that you can manage your finances responsibly, making you an attractive customer for lenders. Here are five ways to improve your credit rating in the UK:

1 – Pay your bills on time: Your payment history is the most critical factor in determining your credit score. Late payments, even by a few days, can significantly impact your score. Set up automatic payments or reminders to ensure you make your payments on time.

2 -Keep your credit utilisation low: Your credit utilization is the percentage of your available credit that you’re using. Ideally, you want to keep your utilisation below 50% of the available credit. For example, if you have a credit card with a £10,000 limit, you should aim to keep your balance below £5,000

3 – Review your credit report regularly: Your credit report is a record of your credit history and is used to calculate your credit score. Review your report regularly to ensure there are no errors or fraudulent activity. You can request a free copy of your credit report from each of the three major credit reference agencies (Experian, Equifax, and TransUnion) once a year. CheckMyFile will allow you to view all 3 agencies under 1 report. This can be beneficial as information can vary on what appears on each, lenders don’t all use the same agencies, some may just use one, and others may use a combination of all 3 so it’s important to know exactly what they will see.

4 – Avoid opening too many new accounts at once: Each time you apply for credit, it may result in a hard inquiry on your credit report, with can have a negative impact on your credit rating and your appeal to potential lenders. Although it never notes the outcome of the credit search, multiple checks in a short period of time may imply a number of rejections on other applications.

5 – Keep old credit accounts open: The length of your credit history is another important factor in determining your score. Closing old credit accounts can shorten your credit history and lower your score. If you have a credit card with no annual fee, it’s usually best to keep it open and use it occasionally.

Improving your credit score in the UK takes time, but by following these tips, you can gradually improve your score and demonstrate your creditworthiness to lenders. Remember to keep track of your credit report, maintain a low credit utilisation, pay your bills on time, and avoid opening too many new accounts. Over time, these habits will help you build a strong credit history and improve your credit score.

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