In this guest piece, Uswitch compiles a list of common occurrences that can impact a credit score, along with potential remedies that can give it a boost.
Maintaining a healthy credit score can sometimes feel like you’re simultaneously juggling and walking a tightrope. This can become even more stressful when you decide you are ready to look into buying a property.
Despite this, having a poor credit score doesn’t have to mean that you can’t have the house of your dreams - there are options open to you, such as using a mortgage broker or receiving a mortgage with a higher interest rate. We provide some handy tips below.
Make sure you are on the electoral register
This sounds like an obvious one, but can also be something that people tend to forget or let slide as time goes by.
Being on the electoral register, quite simply, helps credit checkers identify who you are, which makes the process quicker and easier for everyone involved.
Pay your bills on time
This can be one of the simplest ways to improve your credit score - but also one of the easiest to forget about.
If you are renting a flat, different bills may be taken from different accounts, which could lead you to forget to set up certain direct debits.
Different people paying for different utilities can also lead to late payments, as crossed wires, work or university deadlines can create an overwhelming situation. It is always best to sit down together and set up monthly automatic payments to avoid this.
Consider a credit builder credit card
A credit builder credit card was specially created for people looking for their first credit card, or those who find it hard to apply for more mainstream ones due to bad credit scores.
The main differences of credit builder cards are that the interest rate is usually higher, and the limits are typically a lot lower. However, if you are mainly using it to build or improve your score, this should not be an issue.
Keep an eye on your credit report
Nobody is perfect, and even lenders and mortgage brokers can make mistakes - so always thoroughly read your credit report to look out for them.
Irregularities within your credit report will not always be glaringly obvious, so it could be worth asking a trusted friend or family member to take a look as well.
Keep mature accounts open for as long as possible
This may not always be possible, but some lenders find it appealing if you have managed to keep accounts open for long periods of time.
Being able to manage multiple accounts, especially for a while, would highlight your ability to maintain payments on time and from multiple sources.
Try to stay in the same location for as long as possible
Staying put is usually easier said than done. However, if you have been renting the same property for a number of years, a lender could see this as a sign that you are highly grounded and pay your rent on time.
Moving around a lot could possibly be a sign of not being able to pay rent on time - even if, in reality, it could easily be explained as circumstantial.
The team at Uswitch is always on hand to offer tips and tricks, but always seek the guidance of a qualified mortgage specialist when making any money-related decisions.
*Uswitch is a price comparison service and switching website for energy, personal finance, insurance and communication services