When seeking a mortgage, your borrowing history is crucial. Lenders will review your credit score, a numerical representation of your borrowing history. Factors such as timely monthly payments, credit utilisation, and overall debt determine your score.
If your credit score is low, lenders may view you as a higher risk and hesitate to approve your mortgage application. However, if your credit score is high, lenders are more likely to approve your application. The good news is that there are ways to improve your credit score and increase your chances of being approved. Check out our top tips below.
- ⭐ Avoid rejection – see your Approval Odds before you apply!
- ⭐ Accurate – backed by your credit report
- ⭐ Cheaper borrowing – personalised steps for mortgage success
Get a mortgage, not a rejection! Don’t leave your dream home to chance.SEE MORE
Make sure credit is registered to the right address and name
If you have recently moved, update your current address on credit agreements, like credit cards and personal loans. Also, ensure that the agreements are in the correct name.
Don’t miss credit card or loan repayments
To improve your credit score, make timely debt repayments and pay more than the minimum amount every month to reduce what you owe as soon as possible. Demonstrating responsibility as a borrower can positively impact your credit score.
Check you are on the electoral register
Not being registered to vote can hurt your credit score. You can register to vote at www.gov.uk/register-to-vote.
Shut down any credit accounts you don’t use
If you have many unused credit cards in your wallet, it’s best to dispose of them, as having access to a lot of credit may make lenders anxious. Along with destroying the physical cards, inform the card issuers that you want to close your accounts.
Make sure no one has opened a fraudulent account in your name
To prevent financial fraud, it’s important to regularly review your credit history for any unusual activity that may have impacted your credit score. Contact the related credit provider immediately if you notice any discrepancies. If you suspect you’ve fallen victim to fraud, request that the credit reference agency correct its records and notify Action Fraud at 0300 123 2040. For further information, please visit www.actionfraud.police.uk.
Build your credit history
If you’ve never had a credit card or personal loan, you may have a low credit score because there is no record of how responsible you would be with borrowing. One option to improve your credit score is to apply for a “credit builder” credit card. These cards have low credit limits and high-interest rates, but the idea is that you will pay off your balance each month to demonstrate your ability to manage debt wisely.
Don’t make too many applications for credit at once
To avoid appearing desperate for money in the eyes of lenders, it is important to space out credit applications, including mobile phone contracts. If one lender rejects your application, avoid immediately applying to multiple other lenders, as they will likely reject you. To lessen the impact on your credit score, consider requesting a ‘soft search’ from lenders to find out what kind of lending rate you can get rather than a ‘credit search’.
Ready. Set. Mortgage!
Go from zero to keys with ease….LEARN HOW
Try to avoid joint credit
It’s important to be aware that if you apply for credit jointly and your co-applicant has a poor credit score, it will also impact your credit. If you have ended a joint credit agreement with someone, inform credit reference agencies like Experian, Equifax and CallCredit. This will ensure that your credit history accurately reflects the end of the joint agreement.
Please keep in mind that even if you improve your credit score according to this guide, lenders will still assess the risk of your application. You may not meet their current criteria even with a high credit score. It’s best to consult a mortgage broker who can assess all factors before applying.
Frequently Asked Questions
1. What is a good credit score?
A good credit score is usually around 700 or higher¹.
2. How can I improve my credit score?
- Check your credit report and correct mistakes.
- Register to vote.
- Avoid multiple applications for credit in a short period of time.
You can use Credibble’s comprehensive 24-Factor Credit Check to see the problems your credit score hides and fix them.
3. How long does it take to improve your credit score?
It can take up to six months to see an improvement in your credit score after taking steps to improve it¹.
4. How can I build my credit history?
Having little or no credit history can make it difficult for companies to assess your creditworthiness. You can build your credit history by taking out a credit card or loan and making regular payments on time².
5. How much of my available credit should I use?
It’s best to use no more than 30% of your available credit at any one time¹. Less than 10% is excellent!
6. How long does negative information stay on my credit report?
Negative information such as missed payments or defaults will stay on your credit report for six years².
7. Can I check my own credit report without affecting my score?
Yes, you can check your own credit report without affecting your score using a ‘soft’ search¹.
8. What is a ‘hard’ search?
A ‘hard’ search is when a lender checks your credit report as part of an application for credit. This can affect your score if you make multiple applications in a short period of time¹.
9. How often should I check my credit report?
You should check your credit report regularly to make sure that all the information is accurate and up-to-date¹. Credibble’s Dual ID Fraud Protection monitors for fraud against your credit report and email address.
- How to improve your credit score – Which? https://www.which.co.uk/money/credit-cards-and-loans/credit-scores/how-to-improve-your-credit-score-am4S05w3aUIE
- How To Improve Your Credit Score, Tips & Advice | Experian. https://www.experian.co.uk/consumer/guides/improve-credit-score.html
- How To Build Credit and Credit History | Experian. https://www.experian.co.uk/consumer/guides/building-credit.html