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Improve your mortgage prospects with our tips for a cleaner credit report.

Posted on 23 November 2017
Improve your mortgage prospects with our tips for a cleaner credit report.

Not many of us are likely to be able to buy a house without having to take out a mortgage and getting approved for a loan is one of the biggest steps to buying a property. So, here are our tips for maximising your chances of success when applying for a mortgage by making sure your credit report is as clean as possible.

Access your credit report.

The first step to getting your credit report ready for a mortgage application is to get a hold if it so you can see what your credit situation is. In the UK the main credit reference agencies are Experian, Equifax and Call Credit. It is sometimes worth getting a copy of your credit report from all three as they can sometimes include different information.

Check the Report.

Once you have a copy of your credit report, it’s important to read through it carefully, making sure all of the information is up to date and accurate. Check that your name, address and the details of any County Court Judgments (CCJ) and individual voluntary arrangements (IVA) you have with lenders are correct.

Fix any mistakes.

If you do find any mistakes or any information in the report is out of date, get it corrected. For example, if you are no longer financially linked to someone, like an ex-partner, or a CCJ has been satisfied but isn’t showing as such in the report. If you have missed any payments in the past due to circumstances such as illness or redundancy, you can add a Notice of Correction, a 200 word statement explaining the situation.

Make sure you’re on the electoral roll.

If you’re not already on the electoral roll then you should register to vote. Lenders use the electoral roll to combat identity theft and fraud and check that you really live at the address you give them. If you’re not registered, there’s a much higher chance of your application being turned down.

Close any old or unused accounts. 

When you apply for a mortgage, or any other type of loan, your lender will consider how much money you already owe when they’re deciding whether or not to lend to you. The more credit you have, the less likely you are to be approved for the loan. So, if you have any credit cards or store cards that you aren’t using, you should have these accounts closed.

Prove you’re a safe investment.

When deciding whether or not to approve a mortgage application, banks want to be confident that they’re not going to lose their money, which means you need to demonstrate to them that lending to you is a safe bet. Lenders want to know that you have a stable home and a job with a steady income. Regular income going into your bank account and avoiding rental arrears will make you look like a safer investment for a bank.

If you have any existing loans or other credit arrangements, whether it’s credit cards, an overdraft or a mobile phone contract, keeping on top of these by making payments on time every month will make you look like a responsible borrower for any prospective lender.

Don’t make multiple applications.

If a lender does turn you down for a mortgage, don’t keep on applying with other banks. Every time you apply for a loan it leaves a mark on your credit report. If you have several mortgage applications rejected it will make other potential lenders more wary about lending to you. It’s better to fix whatever issue has prevented you being approved before you try again rather than making multiple applications in a short space of time.

Contact us.

Once you’ve got your credit report ready for a mortgage application, the next step is to find the perfect home for you. Take a look at our website or visit us in one of our branches in Templepatrick or on the Lisburn Road in Belfast to see the homes we have for sale and find out how we can help you.