As today marks an increase in mortgage rates from a number of lenders, it is likely that many homeowners will be looking around for better deals. Leading instant online credit information provider, Equifax, is therefore offering advice to those looking for new mortgages to help them get the best deal.
Neil Munroe commented:
“A number of mortgage providers have been reported as increasing their rates to standard variable rates today”
“Indeed, it is thought nearly six million borrowers are on SVR mortgages. “For some borrowers going onto an SVR could have quite an impact on their monthly outgoings and we believe this is likely to prompt a search for a new, better deal.
“To get the best deal, your credit status needs to be as good as possible. Lenders make checks with credit reference agencies to see whether an applicant has kept up to date on repaying their credit. Having several credit cards with high limits and missing repayments can be cause for concern for some lenders.
"But even minor discrepancies on a credit file could result in an application for a new mortgage being declined. For example, something as simple as not being registered to vote at their current address could affect an individual’s ability to get credit.
“We are, therefore, providing tips for homeowners if they are planning to shop around for a new mortgage. It’s worth them getting a copy of their credit file so that they can see exactly what a lender will see when they make a new mortgage application. And with the new Equifax app, once they’ve registered they can keep on top of their credit data even when they’re on the go.”
Top tips to improve your credit score
- Are you Registered? - The electoral roll is used by many companies for identity verification purposes in order to combat identity fraud. It is vital, therefore, that you are registered on the electoral roll at your current address.
- The Right Address - Also you should check exactly how your address is shown on your credit file. This is how it will be checked by lenders. If you believe the address is not properly presented, you can ask the credit reference agency to take this up with the lenders and the local authorities.
- Are you credit active? - Not having many credit cards or loans can affect your credit score. Lenders are looking for signs that you are capable of repaying money you have borrowed. So it’s worth considering opening an account to establish a credit history – even if you pay it off in full at the end of every month.
- Change of Circumstances - If your circumstances have changed and you have had difficulties keeping up with credit payments, then it’s important to say so, for example if you were made redundant or recently divorced and have fallen behind on credit repayments. You can place a Notice of Correction on your credit file explaining the background to any arrears, especially if you have now got back up to date. A lender will review this when assessing any credit applications you make.
- Incorrect information - If you believe a lender/company has provided incorrect information on your credit file, you can raise a Notice of Dispute with the Credit Reference Agency and they will take this up with the lender. This will usually be resolved within 28 days.
- County Court Judgments & Defaults - If you’ve had a CCJ and it is now settled make sure the settlement is recorded on your credit file. If not contact the court to get confirmation details and inform the credit reference agencies, otherwise it will stay on your file for six years. Plus, if you have a default on your credit file, it will stay there for six years and may affect your ability to get new credit. Again, it’s worth adding a Notice of Correction to explain the circumstances that caused the CCJ or default.
- Avoid a high balance - Avoid carrying a balance that is more than 30% of your credit limit. Lenders may view this as excessive debt and that you may not be able to keep up with repayments.
- Close it Down - Make sure any accounts you don’t need or use are closed. Financial companies are paying more attention to the total amount of credit available to an individual and whilst you may not be using them, dormant accounts could affect your ability to get credit.
- Early Bird Catches the Worm - Try to pay off loans and credit agreements ahead of schedule. Lenders will look favorably on this.
- Stop Applying - If you have been refused credit, obtain a copy of your credit report. But DO NOT carry on applying elsewhere. Each search by a lender will leave a “footprint” on your credit file. Too many searches in a short space of time can be perceived by lenders as you over-stretching yourself financially and could therefore negatively affect your ability to get credit.
