What You Need to Do to Build Up Your Credit Rating when Applying for a Mortgage

Tim October 12, 2015 0
What You Need to Do to Build Up Your Credit Rating when Applying for a Mortgage

If you are thinking of applying for a mortgage, this involves a bit of planning and preparation. First of all, you need to be sure that your finances are in order. List down whatever financial resources you have, and make sure you know how much you have in terms of savings in the present and for the future. Secondly, you need to come up with a particular budget for the property you have in mind, and you can only do this if you do the proper research on the area and the properties listed there.

But alongside these preparations, you also need to make certain that you have a good credit rating. If you don’t have a credit card yet, it may be a good time to get one, spend on it, and then pay your debt back as soon as possible. This will be a good sign for lenders as they can see proof that you are capable of paying back what you owe. So how else can you make certain that your credit rating and credit score will be enough to impress prospective mortgage lenders? Here’s how:

Find out your credit rating

You should check your credit rating by asking for a credit report from a credit reference firm. This credit report includes details of your financial spending and borrowing for up to six years prior to the present year. The thing is, when you apply for a mortgage, the lender will most certainly rely on a credit reference agency to find out about your financial situation and your past debts. The information gathered by a credit reference firm is often sourced from judgments in the county court, the electoral roll, and more.

Once you have a copy of your credit report, you need to go through it thoroughly to see if there are inconsistencies such as different addresses and wrong information about debts and payments. The credit report may also include information on an old account which you have not closed. The point is, if you find anything wrong in your credit report, now is the time to have it fixed.

What to do if you have a low credit score

If you already have your credit report and see that you have a low credit score, there are ways to amend this as well. For instance, if you have missed payments, make sure you pay the debt then speak with the credit card company and ask them to adjust it so it will be reflected in your credit report. Another thing you can do if you have any black mark is request for a Note of Correction. By doing this, any lender who checks your credit report will see this Note of Correction and understand that there has been an issue but it has now been resolved.

Additional tips on building up your credit rating

In the perfect scenario, you need to have a good credit history for at least a year before you apply for your mortgage. Lenders want to see that you have had debt previously but were able to repay it. If you already have a mobile contract or an Internet contract, make sure that it is always paid on time, as this will be reflected in your report as well.

Speaking to the experts is also a big help. Seek out mortgage brokers who are experienced in the area you are interested in. if you would like to purchase property in Chelmsford, look for a mortgage broker in Chelmsford who has ample experience. Getting good mortgage advice from Chelmsford-based brokers goes a long way to helping you get the property you want.

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