We cannot overemphasise, your credit rating is INCREDIBLY important when it comes to getting the mortgage you want!
It shows the lender that you are responsible & organised with your borrowing, and pay back what you owe. One of the first questions we ask customers is if they have checked their credit report recently, and whether there are any problems they are aware of.
All is not lost should there be issues with credit, but the likelihood is you will end up with fewer lending options and the mortgage will cost you more in fee’s or interest rate.
Keeping a close eye on your credit report can ensure there are no nasty surprises when you come to apply.
Here’s our 7 top things you need to be aware of…
Employment status – Having an income is obviously incredibly important to a lender! This can be employed, self-employed, or a pension.
Missed or late payments – Lenders will be asking you whether you have missed any payments on your commitments when you apply. Ideally all your monthly payments will be set up on Direct Debit so they can’t be forgotten, but should you have missed payments, the lenders will want to know how long ago they were, how many, how much the amount was, and the reason for it not being paid. They will get a lot of this income from your credit report.
Credit checks – By having multiple credit checks done over a short period of time you can temporarily lower your credit score. This is a warning indicator that you may be in trouble and needing funds urgently. It could of course be, that you have used comparison sites & if you are simply shopping around it will return to ‘normal’ but try and avoid doing these things before and during a mortgage application.
Credit utilisation – How close you are to your credit limits will also affect your score. Where possible try and keep the amounts on credit cards etc well within their limit which shows you aren’t ‘maxing out’.
Ratio of debt to income – The amount on borrowing you have compared to the amount you earn will be a consideration to the lender. This is due to how long it will take you to clear those debts.
Court data – A big issue on credit ratings are County Court Judgements (CCJ’s) and Bankruptcies. Lenders opinions vary on how they deal with these, but as with missed or late payments it is likely to cause you to pay more on your mortgage.
Electoral Role – Being registered at your home with the local council will improve your score. It helps evidence your address history and means all your commitments & payments can be accurately cracked.
If you’ve got any questions about your own scores or where you find out about them, then give us a call!
Holly Bettles brings to Coastway Financial a wealth of experience having worked both as a broker and a mortgage adviser for a reputable high street bank.
She is experienced in both mortgages and insurances and has a passion for giving great customer service.
Always happy to go the extra mile to ensure the customer has the right product and Holly will be delighted to guide you through the process. Whether you are experienced with property ownership or a first time buyer Holly will ensure the process is as hassle free and smooth as possible.
With a young family herself she understands that 9-5 doesn’t work for everyone. That is why Holly is flexible with her availability to give the customer her knowledge and expertise at a time that suits them.
Please quote budgeting and planning when contacting her.