Ensure you are on the Electoral Register
Registering on the electoral roll can give lenders proof of your name and address. It allows them to verify your identity and can help to combat identity fraud. Keep your accounts updated with your correct address and name – ensure you use the same address format and if you have recently changed your name ensure everything is updated i.e. driving licence, bank details and any credit agreements you have. Lenders like stability so the least number of addresses you have had in the last 3 years, the better.
Making full repayments on time
If you have any credit, missed payments are recorded on your credit report. This may show lenders that you’re financially stretched, or that you’re having difficulty managing debt, which may negatively affect your chances of applying for credit.
Making your repayments in full and on time can help prove to lenders that you are sensible with your money and can pay back what you borrow. If lenders see evidence that you have previously managed your credit accounts well, this may also help improve your credit score. A tip to avoid forgetting to make your payment on time is to set up your minimum payment to come out by direct debit. This way you can’t accidentally forget to pay it.
Cutting financial ties
Having combined finances – like a joint mortgage or credit card – with someone else is called a financial association. Lenders can view their credit history even if you’re applying for credit on your own. If this is poor, it could affect your ability to gain credit, even if you’re applying for it on your own. If you’re rejected by too many lenders, this could have an impact on your own credit history, and affect your score.
Existing access to credit
If you currently have a significant amount of credit available, for example if you have multiple credit cards or a large overdraft, lenders may view this as a negative. If you already have access to credit, why would you need to apply for more?
If you have credit cards you never use, it may help to close these accounts. It’s also important to remember though that what you owe should not make up a high proportion of your overall limit. It may be wise to balance paying off debts, with closing old accounts.
Dispute inaccuracies
If you find any incorrect information on your credit report, dispute it.
Have some debt!
Yep, you read that correctly! Having some debt will help you get more. The rationale to this is that if you have a track record of borrowing money and paying it back on time, it will reassure a potential lender that you are a safe bet.
Picking your applications
When you apply for credit, it leaves a ‘footprint’ on your credit report. This means that the name of the lender, the date the application was made, and the type of credit you were applying for is recorded. Making too many applications in a short space of time can have a negative impact on your credit score as it might indicate to lenders that you’re having difficulties applying for credit. This may also suggest that you have a poor financial record, and affect the success of your application. Spacing out and limiting the number of applications you make may prevent this from happening.
Some lenders will do an initial check using a “soft footprint”. This shows up on the credit report when you look at it but not when a lender does. This is much better for you initially as you can do as many of these as you need without affecting your credit score.
Do you use “buy now, pay later” loans?
Lenders are not keen on “buy now, pay later” methods of purchasing goods. There are a few options out there that provide this facility, like Klarna or PayPal. Please bear in mind that if you use these methods they are a form of credit and could affect your credit score.
If you have a lot of “buy now, pay later” payments on your bank statements the lenders may view this as a sign that you could be living outside your means and using credit to buy things you couldn’t afford.
If you miss one of these repayments, this will have a negative effect on your credit score, it will be reported as a late or missed payment to the credit reference agencies and will stay on your credit file for six years.
On the other hand, making small, timely payments can build a positive repayment record that shows you managed the credit responsibly.
Our suggestion would be to not have any, or ensure any “buy now, pay later” loans are fully paid off when you are looking to purchase a property or remortgage.
How to check your credit file
There are three main credit reference agencies that mortgage companies use, Equifax, Experian and TransUnion, and they all hold information on you which lenders use, and your payment history. Even small errors can cause problems, so it’s important you check through your credit history. The report shows what credit arrangements you have both past and present. It shows whether you have made your payments on time and if you have any defaults or CCJ’s. It shows your address history and where you were registered on the voters roll. It also has details of any financial connections you may have with other people.
At Excel Mortgages we recommend getting a report from CheckMyFile.
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Continue to www.checkmyfile.com
CheckMyFile produces a report showing the details Experian, Equifax, and TransUnion hold on you. CheckMyFile puts everything in one place, making it easier to see and take action if you want to fix an error or improve your credit score.
They offer a free 30 day trial for new customers which we recommend anyone considering getting a mortgage takes advantage of. If you want to see what your credit score is and check that the details are correct. Click on the CheckMyFile Link.
After the 30 day free trial the cost is £14.99 per month (as at 27th March 2025), you can cancel this at any time – if you cancel before the end of the free trial you will not be charged. Any questions? We are always here to help.