Improve Your Credit Score – Get That Great Mortgage Deal
how-to-improve-credit-score

Improve Your Credit Score – Get That Great Mortgage Deal

Why Do I Need A Good Credit Score?

Credit Scores or credit ratings as they are also known do indeed effect the rates at which a lender will allow you to borrow money. However it is only one of several factors the lender will consider.

In the first instance you may ask, why do you need a credit score at all? Credit scores are not just used by mortgage lenders they are also used by Landlords when you apply to rent a flat, if you want a credit card or a loan. Not to mention that some potential employers will also look at your credit score as a measure of your suitability for certain jobs.

Therefore a good credit score will be seen as a measure by a lender that you are likely to be a good credit risk. They will, along with other factors, use a credit score to determine, how much they will lend you and at what rate. As a consequence of having a poor credit score some lenders will only offer a higher than average rates. Additionally, in some instances, it may prevent you from being able to borrow money from certain lenders.

How Is My Credit Score Decided?

First things first, when you check your credit score how do I know what is a good Credit Score?

Three of the credit scoring agencies, probably the most commonly known, are Equifax, Experian and Transunion:-

  • An Equifax score of more than 420 out of 700 is considered to be a good score.
  • An Experian score of 880 out of 999 is also considered good.
  • Finally, a Transunion score, which sits in the middle, with a good credit score reading in at 628 out of 710.

If you look up your score and see that it is below these figures don’t despair there are many things you can do to raise your score.

The way your credit score is made up is by credit scoring company analysing five factors:-

Payment History – This aspect influences around 35% of the scoring. This is not surprising as it is a clear indicator of your ability to pay. Late payments can be described as, payments made after the due date, missed payments, a collection agency calling and the most negative one being bankruptcy.  Any of these or any combination will affect your credit score negatively. Furthermore any recently unpaid bills will also reflect badly on your score.

Total amounts owed – The influence of this factor is 30% of the total scoring. If you have large or multiple borrowings you will be seen as a higher risk and your score will be adjusted downward. In addition, beware of falling into the trap of borrowing more money to pay off debts, as a result of this type of borrowing a negative factor will be built into your credit score. The ideal ratio for borrowing is to keep the level of available credit and your actual borrowing to around a figure of 35% of the total available to you.

Length of credit history – The weight of this factor is 15% of the overall scoring. This is viewing the patterns of your payments. Therefore, never having missed a payment is a great asset in the building up of a good credit score. In addition to the other factors, if you have a great overall payment history the lenders will see you as a good risk as “passed performance is an indicator of future behaviour.”

New credit being sought – Of the final 20% this provides 10% toward the score, the more applications made the greater the need to borrow more money will be seen, not only that but the more recent the applications the more of a negative impact they will have.

Types of credit being used – this element completes the picture to the lender, in deciding your final credit score. Taking out different types of credit, such as rolling credit (a credit card) and installment credit (a repayment loan) will allow the rating firm to see that you have been offered both easier credit and more difficult credit. As a result of this information there will be a positive effect on your credit score.

Improve Your Credit Score - Get That Great Mortgage Deal Express ConveyancingWhich Actions Can Improve The Score

There are a whole host of alternative ways you can improve your score, some ways are quicker than others but added together will put your score back on the right track.

  • One of the more obvious things to do but is often overlooked is actually read through the credit information you receive from the credit rating company. More often than you think they are incorrect. If you find an error you have the right to ask for it to be corrected or removed. In the event of incorrect details being found and then removed there could be an instant improvement to your score.
  • If you do not agree with any details in the report, say for example you find a late payment detailed and you know it to be incorrect, raise the issue by disputing the details. The agencies are under a legal obligation to investigate and must remove any incorrect information.
  • Ensure that any late payments are made up to date. Likewise if your are over your credit limit make a payment and bring it down to the agreed level.
  • If you have an over all credit limit with either one card or through several credit cards add up the maximum you are allowed to use. So if you have a total limits of £20,000 make sure the amount outstanding is no more than £6000. If you can’t do this request a larger limits this has the same effect of bringing the ratio down to the level the agencies will like.

Other Helpful Ways To Improve Your Score That You May Not Have Thought Of

 If you are looking for your first ever mortgage and have shied away from loans and credit cards, you need a credit history. Actually it is a positive move to take out a credit card and use it. Always pay it back in full each time and the easiest way to do this is to have a direct debit which takes the full amount owed from your account each month.

If you have an old account which is still open, for example from when you started your first job and it has a good record, don’t close it. If you no longer use it, start it up again, the further back your financial history goes back the better.

Always make your payments on time, direct debits esure that this is taken care of automatically, so forgetting to make the payment doesn’t happen.

If you have several debts try consolidating them into a fixed repayment loan, this will save you money as fixed repayments usually have lower interest rates.

What Else Will A Lender Look For

Mortgage companies have a fairly set criteria, which they consider when you make your application for a loan.

The bank or building society will want to ensure that whatever they agree to lend you, you will be able to afford to make the repayments and you can, ultimately, pay them back. After the financial crash of 2008 the criteria was radically changed by the Financial Conduct Authority ( FCA ). In 2014 new guidelines were issued.

Mortgage lenders now have to consider several other factors over and above your income.

  • Your Employment status
  • Any allowances you are paid and how they are paid
  • How you’re outgoings affect your disposable income
  • Your Credit history

 So if you get your ducks in a row you should be able to pick up a great mortgage deal.

What our clients say

Great value for money. Everything went smoothly and I was very pleased with the service provided
Rachel Whitfield
Rachel Whitfield
20:59 12 Oct 18
Excellent! Very responsive, and really helped to push the purchase. There were unexpected delays during the process, but Anthony really helped to reassure me that he was doing everything he could to progress the sale. Ultimately, it all worked out in the end, and I would highly recommend! I would also recommend for auction purposes.
Sean Stevens
Sean Stevens
09:14 21 May 18
Very happy customer. Understanding of our needs and recommended a really fantastic solicitor.
Jack Hearne
Jack Hearne
17:49 12 Oct 18
I have just completed the purchase of my flat with them. They were recommend by the estates agents Phillip Arnold and they were fantastic. My case was handled by Milena who was really helpful and always available on the phone. The online system is also really easy to use. If I buy or sell a property I will definitely be using them again.
Sharon Kelly
Sharon Kelly
18:27 20 Dec 17
I used this service following a recommendation. The online case tracker worked really well. I would recommend this service as it's vital in the coordination between Estate Agencies and between Solicitors. The service proved invaluable in helping progress the conveyancing work efficiently and effectively. Completed the transaction just before Christmas having instructed the Solicitors on the 4th.
Shelly Harrill
Shelly Harrill
16:30 19 Dec 17
Excellent Service. Final Price same as quoted.
A Google User
A Google User
14:26 19 Dec 18
Have used them twice. Both times completion happened in less than 4 weeks, even over Xmas! Totally amazing. They take the stress out of the whole process.
Daniel West
Daniel West
13:04 21 Dec 18
Excellent Service. Final Price same as quoted
Parsa Khamooshi
Parsa Khamooshi
15:54 21 Dec 18
Being a first time buyer they guided me smoothly through the whole process of moving into my first home. Very professional and economical.
Uday Seth
Uday Seth
12:31 24 Dec 18
Express Conveyancing have been excellent in the handling of my recent house sale and purchase. Would highly recommend
James Ellis
James Ellis
11:43 30 Apr 19
Express Conveyancing have been excellent in the handling of my recent house sale and purchase. Would highly recommend
Michelle Preston
Michelle Preston
12:20 30 Apr 19
ThanksThanks for handling my sale and purchase. No complaints from me. Rebecca was regularly on hand to help with my queries and deal with issues.
Claire Miles
Claire Miles
17:48 07 May 19
I bought my first home in South London with Express Conveyancing . Great professional service, I was regularly updated and looked after. Top marks, 100% recommendation from me!
Dale Griffiths
Dale Griffiths
15:58 02 May 19
Good service and happy with the conveyancer
Chris Jenkins
Chris Jenkins
22:01 17 May 19
Great service from start to finish. Was great being able to see progress online! Very quick and efficient! All staff were helpful. Highly recommend
Reece Moseley
Reece Moseley
06:20 30 May 19
I would highly recommend them. They deal with any queries promptly and efficiently. Would definitely use them again.
Sahar Dalini
Sahar Dalini
09:13 10 Jun 19
Fair prices good efficient service
Sue Batchelor
Sue Batchelor
18:46 01 Jun 19
I would highly recommend them. They deal with any queries promptly and efficiently. Would definitely use them again.
Sahar Dalini
Sahar Dalini
09:14 10 Jun 19
This company does not provide conveyancing services directly, they are an introductory company, paid by solicitors to get clients for them. Once you engage with a conveyancing solicitor suggested by them, they don't interfere, and how quick or slow the process is depends on that solicitor that paid them to recruit you. In our case the solicitor was pleasant and corteous, but a bit relaxed, and the whole process took about 9 weeks - about average, but there was nothing "express" about it.About the app to track progress, it is updated by the conveyancing solicitor, so its its usefulness depends on how much he engages with it. In our case, not so much.
Pedro Silva
Pedro Silva
18:27 02 Oct 19
Absolutely outstanding service provided by Rebecca. She really got things moving when they came to a halt. I was moved within 9 weeks. If it wasn't for Rebecca, the move wouldnt have happened that quick. Definitely use EC again in the future.
Sara Kawsar
Sara Kawsar
11:35 03 Oct 19
we purchased a new build flat. The staff at Express were very helpful in finding us our solicitors who was great.
Carl Devenport
Carl Devenport
14:48 26 Sep 19
great service. Completed quickly as promised
Mark Slavinski
Mark Slavinski
16:52 24 Sep 19
Was looking for a modern solicitor with an online website status page so you can live track your progress. The service was fast and they assigned us with a solicitor firm, which was very fast, efficient and pleasant to deal with. HIGHLY RECOMMENDED
Cedric Tomas
Cedric Tomas
21:29 13 Mar 20
Express provided me with an excellent firm (WYM Legal) and had a good portal for keeping me updated during the process. The portal did lack detail but nonetheless meant slightly less chasing.
Sarju Shah
Sarju Shah
10:50 11 Apr 20

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