How to improve your credit rating

If you have adverse or bad credit, it can be a very worrying time. Especially if you want to take out a new mortgage or renew your existing one.

In this guide, we hope to help show you how to improve your credit rating. If we can help with your journey to getting a mortgage, please get in touch.

Why is a credit rating important?

All lenders want to see that you have a good credit score to help decide whether to:

Lend you money
How much to lend you and sometimes,
How much interest to charge

If you have a good credit score, then you’ll stand a better chance of getting the mortgage deal you want. Ultimately you will be able to borrow the maximum amount to help you buy the house that you want.

Step 1 Check your credit score

Your first step to improving your credit rating us understanding the current situation. Knowledge is key!

So start by checking your credit score. There are various companies who can give you your credit score. They will provide a thorough report of all your credit accounts. It will include outstanding loans and any missed or late payments over the last six years. As well as any other people who are financially linked to you. Sometimes the reports do contain inaccurate information, if this is the case, you can get this put right before applying for a mortgage.

If you want any help of guidance on how to check your credit score, feel free to get in touch.

Step 2 Show an account history

Start by proving you have a good history when it comes to managing your finances. Having a history of bank accounts will give your mortgage adviser a decent history of your credit to look back through.

Step 3 Declare your address

Lenders will need to see proof of your name and address in order to trust you are who you say you are. Register on the electoral roll and make sure all of your bills and credit commitments are registered to your current address. This way, everything is easy to trace back to you and confirms your identity.

Step 4 Use a credit card responsibly

Always try to retain a good amount of available credit. Available credit is the difference between what your outstanding balance is and your total credit limit. If your available credit is low, this would indicate that you’re struggling to keep tabs on your finances. Also, never withdraw cash from your credit card. This will go against your credit score as it looks like you’re having to make the withdrawal because you have no money left in your own bank account, even if this isn’t the case.

Step 5 Don’t miss repayments

This may sound like an obvious one but missing payments will have am detrimental affect on your credit score. Despite your hard efforts to do everything else, missing repayments shows that you are incapable of managing your finances and paying your bills on time – which isn’t great if you’re trying to get a mortgage.

Step 6 If you have bad credit, stop applying for more credit

If you know for a fact that you have bad credit – having multiple credit searches carried out in a short space of time can go against you. It’s advisable that in the meantime, you don’t apply for anymore credit and concentrate in clearing your existing debt instead.

Step 7 Don’t keep unused cards

Holding on to credit cards you no longer can be misleading as to how much available credit you have. So make sure you cancel any accounts you don’t use and cut up the card before throwing it away.

If there’s anything you’ve read in this Guide to how can I improve my credit rating that you’d like explaining in a little more detail, please don’t hesitate to get in touch with us.

A MORTGAGE IS A LOAN SECURED AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

YOU MAY NEED TO PAY AN EARLY REPAYMENT CHARGE TO YOUR EXISTING LENDER IF YOU REMORTGAGE.

There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.

Our handy mortgage calculator

Our mortgage calculator can help you get a better idea of how much you can afford to borrow, and how much your mortgage will cost you in monthly repayments.

CALCULATE NOW

“This was knight in shining armour stuff. Our conscientious mortgage broker was a delight to deal with from the off and the key to our dream home.”

Max and Martha, First Time Buyer customers from Cardiff
“Being in the Armed Forces I am away a lot, meaning it can be hard to attend meetings, answer emails and especially hard to fill in forms. Adam and his team were extremely helpful and understanding of our situation and provided help wherever they could. After our initial meeting where we provided our required details, we actually did very little of the hard work, apart from signing a couple of papers.”

Callum and Verena, First Time Buyer Armed Forces Mortgage Customer from Salisbury
“I expect my circumstances were fairly rare, but the help and guidance I received from you was invaluable. I feel that the personal touch you provide offers something that appeals to the soldier in me.  During my service I always liked to have a point of contact, someone who was the “go to” specialist in their field.  This provides a degree of assurance about a situation and it was refreshing to find that same degree of certainty transitioning to civilian life, particularly with something as important as a mortgage and buying our family home.”

Andrew and Helen, Armed Forces Mortgage Customers from Salisbury
“Even though we were used to having a mortgage on the rental property, paying a mortgage on your own home was still a bit of a shock after years of having married quarter rental deducted from your pay at source. But, at every step along the way, we felt reassured, understood and that we really mattered to Adam. Trust is an important concept for military families and we trusted Adam.”

Fiona and Graham, Armed Forces Mortgage Customers from Wilton
“As a contractor, it was difficult for me to obtain a mortgage through normal channels so it was great to find a mortgage adviser that specialised in contractor remortgages and understood the challenges. In addition, I had fairly tight timescales, so wanted someone who could make the process quick and hassle free.”

Andrea, Contractor Mortgage Customer from Warminster
“I am a contractor, therefore require specialist mortgage advice. Adam has now concluded two mortgages for us (new mortgage then a contractor remortgage), and is currently arranging a buy-to-let mortgage for us. He also arranged our life insurance for us. We keep returning to him for some great reasons – he is always available, and ready to help. He provides great advice, and always ensures that he meets our requirements exactly. He is prepared to explain things in such a way that even a lummox like me can understand, and his level of service has remained consistently good over the last three years.”

Matt, Contractor Mortgage Customer from Southampton
“Adam’s advice on the different types of critical illness and life insurance were really useful. He also worked with us to decide the best combination of policies that would work with our existing policies to cover our needs. When doing this he happily tweaked quotes for us until we came out with an arrangement that was both affordable and would provide us with the level of cover we thought appropriate.”

Hannah and Steve, Protection Insurance Customers from Stamford
“Adam provided us with factual advice and also with options of which we were unaware. The advice on gifted equity was something we hadn’t heard about and this assisted us hugely to ensure repayments worked within our affordability. He provided us with a very personal service that made the journey from initial call, to mortgage offer and completion hassle free. We have already recommended Adam to someone and will continue to recommend his services in the future.”

Saul and Laura, Home Mover Mortgage Customers from Salisbury
“Mike and I collected the keys to our flat this weekend and we couldn’t be happier. It’s been a long time coming but we got there! We just wanted to say a MASSIVE thank you for everything you have done for us so far. We’ve really appreciated all the help, advice and reassurance you’ve given us all the way through this process. It’s really nice to have a friendly voice on the other end of the phone.”

Mike and Bethan, First Time Buyer Mortgage Customers from London
“Without question Adam found me a deal the estate agent’s broker couldn’t. He was very easy to contact whenever I needed him and he took time to explain the ins and outs of the Help to Buy equity loan scheme mortgage that he found me. I would rate him five out of five and will be back to use him when the time comes to remortgage or move.”

Chris, Help to Buy Mortgage Customer from Southampton

How to improve your Credit Rating