Do you know what your credit score is?

If you don’t, you’re not alone. New research presented by Money Age has revealed that 62% of UK adults have no idea what their credit score is. Worryingly, half of those looking to purchase a home in the next year are unsure about their score.

Not only that, but almost two-thirds (60%) of respondents said they’ve never taken steps to improve their score, with a further 13% not sure what steps they can take to do this.

These figures are surprising, as a good credit score is vital when it comes to getting a mortgage. Having a good credit score won’t just show potential lenders that you can be trusted to pay back your debts, but it could also give you access to the best interest rates available that are typically reserved for lower-risk borrowers.

So, what steps can you take to improve your credit score? Continue reading to find out the ways you can boost your score and potentially cut the cost of borrowing for your mortgage.

Register on the electoral roll                                                                   

This may seem like the last thing on your mind when you’re trying to improve your credit score, but registering for the electoral roll is an easy way to boost your score.

That’s because lenders can then use this information to confirm your name and address, verify your identity, and to confirm you are who you say you are, giving them peace of mind.

Build a credit history

One of the ways to build your credit history is to take out some credit – perhaps a credit card, for example.  

You should then use your credit card sensibly for things that are regular, budgeted items you always pay every month. By paying off your credit debt immediately, not only will you avoid paying high rates of interest on your debt, but you will also get a boost to your credit score. This will show potential lenders that you can manage debt and use credit responsibly.

If you end up having to use your credit card in a pinch, however, you should make sure you make your payments on time, as not doing so could negatively affect your credit score.

Ensure you make scheduled payments on time

Including previously mentioned credit card debts, you should make sure that you make other scheduled payments on time. This could include anything from Spotify to your utility bills.

In fact, you might want to go out of your way to sign up for some of these services so you can start paying them regularly and demonstrating to potential lenders that you can make these payments on time. Paying a mobile phone bill on time every month, for example, can boost your credit score.

Keep your credit utilisation low

Your credit utilisation is the percentage of your credit limit that you actually use. For example, if you have a credit limit of £2,000 and you’ve used £1,000, this means your credit utilisation is 50%.

A lower credit utilisation will be seen more positively by lenders and will show that you are sensible when it comes to borrowing.

Fix any problems in your credit file

When you ask for your credit report, there may be a chance that some of your information is incorrect, or the company has made a mistake.

If you do spot a mistake, you can ask the credit reference agency to rectify the error. They have 28 days to either remove the incorrect information or tell you why they don’t agree with your request.

During these 28 days, the mistake in your credit file will be noted as “disputed” and potential lenders can’t use it when reviewing your credit score.

Report any credit fraud you have been a victim of

If at any time in the past, you’ve had your identity stolen and been victim to credit fraud, there’s a good chance your credit score will have been negatively affected.

If this is the case, you will need to get hold of your credit report from all three main credit reference agencies (Experian, Equifax, and TransUnion).

Once you have all three credit reports, you will be able to see if there are any credit searches or accounts open that you didn’t apply for, and then you can report this to the credit reference agency.

When reported, you will typically be asked to provide information that your chosen credit reference agency will then use to dispute any fraudulent activity with lenders and try to clear up the problem.

How to obtain a copy of your credit report

All credit reference agencies must provide you with a copy of your credit report for free. So, it can be useful to get hold of your credit report before you apply for a mortgage to see what information is held.

Your credit file will show information such as:

  • The credit you have applied for in the past
  • Your payment record and how you have maintained your payments
  • Details of anyone financially linked to you
  • Public records such as any County Court Judgments (CCJs), bankruptcies, or Individual Voluntary Arrangements (IVAs).

Note that information from credit referencing agencies only offers a general indication of how likely it is that a bank or building society will offer you credit. This is because every lender uses its own criteria, and these will vary from lender to lender.

To obtain a copy of your credit report:

Get in touch

If you would like to find out more ways you can boost your credit score, please email or call (0207) 808 4120 to find out more.

Please note

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it. Think carefully before securing other debts against your home.

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