How to build up your credit score and save for a mortgage

As a first time buyer, having a good credit score is key to securing a mortgage. Lenders will look carefully at your credit rating when assessing your application; as this will allow them to establish whether or not you have a good record of keeping up to date with loans and other credit commitments. A poor credit report could mean no mortgage so it’s important to make sure that yours is as good and as accurate as it can be.

Make sure your credit file is correct

First, get a copy of your credit file and check it thoroughly to ensure that all of the details are up to date and correct. You can request a copy from a credit reference agency, such as Experian, Equifax or Callcredit. They’ll have information from various sources, and your file is updated electronically each time you open up a new form of credit. You can obtain a free copy of your ClearScore credit report here

You have a statutory right to a copy of your report for £2, and to have any errors corrected. Check that your address is correct on all of the active accounts, and that credit lines you no longer use, such as credit or store cards, have been shut down.

Prove you’re a good borrower

Having no record of your borrowing behaviour can also pose a problem for lenders, as they are unable to see how reliable you are when it comes to repaying your debts. If you can apply for a form of credit and build up a history of making your repayments on time each month, this could help to boost your credit rating and could prove to a lender that you can borrow responsibly.

Try to pay off as many existing debts as you can

If you are in a position to do so, then you should try to pay off as many outstanding debts as possible. You could, for example, try paying off more of your credit card than just the minimum payment. This can help improve your credit score, and could also allow you to borrow more when it comes to applying for a mortgage.

Get on the electoral roll

This is a simple and effective way to improve your chances of being accepted for credit. If you’re not yet registered to vote at your current property, sign up now. Just find your local council online and apply – it’s easy to do and can have a big effect on your credit score.

Don’t apply for lots of credit

Any application – whether it be for a mortgage, car insurance policy or mobile phone contract – will be recorded as a footprint on your credit file, even if it is not successful. This will be seen by other lenders, and a file showing a large amount of applications in a short space of time will make them less inclined to lend. Each lender has their own criteria and way of assessing potential borrowers, but every one of them will want to know that you are a responsible and safe borrower. Anything you can do to make sure your credit score reflects this will help you become a better candidate for a mortgage.
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