How to boost your credit score in the UK to secure a better mortgage deal

The dream of homeownership in the UK often hangs in the balance on a three-digit figure. ‘What is this?’ you may ask. It is your credit score. This number, in the form of a score dictates your financial responsibility, influencing not just your mortgage eligibility but also the interest rate you pay. This article deals on how to get your credit score to a respectable point by putting together some simple, but effective strategies. Read on, you’re sure to find this interesting.

Understanding Your Score

Think of your credit score as a financial report card, thats graded by Credit Reference Agencies (CRAs). They go into detail on your borrowing history, payment habits, and debt levels to assign you a score, in the UK they typically range between 300 to 999. The higher your score, the more trustworthy you appear to lenders, this ideally translates to better loan terms and even lower interest rates.

So, how do you transform a not so great credit score to a desirable one that a lender will look at favourably? Check out these pointers that will help you do just that:

  1. Timely payments means everything: As in any monthly instalment repayment facility (i.e.: credit card repayments, loan repayments, HP payments, etc), making your due payment on time means credibility. These timely monthly payments will make a good impression when it comes to going ahead with the mortgage deal.This can help towards getting a good credit score.
  2. Utilisation of monetary resources: Don't overspend on your credit cards. Imagine your credit card limit as a gauge that tells you when you’ve been over spending. Keeping your outstanding balance below 30% of that limit makes you look financially sensible as well as stable. 
  3. Debts: Keep in mind that high debt-to-income ratio can be a red flag for lenders. Consider making over payments towards any existing debt you have to reduce the balance. It could be worth seeking advice as to what's the best way to tackle your debt. You could even consider selling something that you no longer use to help settle outstanding debt. Although seemingly insignificant, debts like these can make all the difference when applying for a mortgage.
  4. Register to vote: This might seem unrelated, but registering on the electoral roll makes you someone traceable and reliable to a lender. This translates into score-boosting points. Lenders want to know who they are dealing with. And registering as a voter is a show of confidence to the lender.
  5. Credit report clarity: Mistakes can occur at any instance. And it is possible it can happen with your credit score as well. Do check your credit score with the registered agency to ensure all checks out well before applying for a mortgage. In the event there are any discrepancies, you have 28 days where you can clarify the mistake, be it yours or theirs. If you are unable to carry out any clarifications in time before applying for your mortgage, you lodge a Notice of Correction with the agency. Although this will not affect the credit score, it could slow down the process of your mortgage application. Websites like Experian* and Equifax* offer free credit score checks. 

Boosting your credit score means everything when it concerns a mortgage. After all getting your first property is a big step and it doesn’t need to fall short right at the beginning of the mortgage process. The UK house and property market is huge and getting the right opportunity to get yourself the property you’ve been waiting for, can be a once in lifetime chance. A low credit score can make the difference between making your plans work or not.

These tips on how to boost your credit score will certainly help you on your path to making informed decisions without any doubt. If you think you need more help, why not speak to the experts at BVS Mortgages and Financial Services? They are experts in the field of mortgaging and will gladly assist you to clarify any doubts about your credit score. The new year is here and it’s time you made a life changing new year resolution by getting your own property!

Your home may be repossessed if you do not keep up repayments on your mortgage.

* Approved by the Openwork Partnership on 26/02/2024