How a Credit Score Plays a Role in Getting a Mortgage in Manchester
Securing a mortgage can be a daunting task, whether you’re a first time buyer in Manchester, relocating in the area, wanting to know your remortgage options or a buy to let landlord. A crucial factor in determining your eligibility for a mortgage is your credit score.
In general, the higher your credit score, the more likely you are to be approved for a mortgage. However, it’s worth noting that lenders have their own internal credit score, which considers the information on your credit report as well as your application.
It’s essential to remember that each mortgage provider may have its own credit scoring policy. Therefore, just because one high street bank rejects your application, it doesn’t necessarily mean that all of them will do the same. Thus, it’s worth considering multiple lenders to increase your chances of being approved.
Credit Score Agencies
One issue that arises when trying to obtain a mortgage is determining which credit reference agency to use or which agency the lender will use. Unfortunately, lenders do not always disclose this information, and sometimes they switch between Experian, Equifax, and Call Credit.
Therefore, it’s best practice to check multiple credit reference agencies when looking to secure a mortgage. This is because the information on one agency’s file may differ from that on another, potentially affecting your credit score and, therefore, your eligibility for a mortgage.
Way To Improve Your Credit Score in Manchester
Improving your credit score is crucial because it means that you’re more likely to be approved for better interest rates and terms. This, in turn, can lead to lower monthly payments and reduced overall repayment costs.
Stop Unnecessary Credit Searches
If you’re planning to check your credit score, it’s crucial to avoid applying for new credit until you’ve registered with one of the credit reference agencies. Every time you apply for credit, such as a credit card or loan, a credit search is conducted, which can negatively impact your credit score.
Put The Right Address on The Electoral Roll
When applying for credit, lenders will typically use the electoral roll to verify your identity. As such, it’s crucial to ensure that your details are up-to-date and correctly recorded on the electoral roll. This involves verifying that your name is spelt correctly and that you’re registered at your current address.
Your credit file will show whether or not you’re registered on the electoral roll, and you can check this information with your local council. It’s essential to verify that you’re registered because not being on the electoral roll can negatively impact your credit score and affect your chances of being approved for credit.
Registering on the electoral roll can be done easily online or by completing a paper form and submitting it to your local council.
Active Credit
One way to improve your credit score is to have some “active credit,” which means having a credit card that you use regularly and pay off in full each month. This shows mortgage lenders that you are responsible with your finances and can handle debt effectively.
However, it’s important to keep in mind that taking out new credit can have a short-term negative impact on your credit score. This is because it can lower the average age of your credit accounts and increase the number of hard inquiries on your credit report. Therefore, if you’re planning to apply for a mortgage in the near future, it’s best to avoid taking out any new credit.
Additionally, it’s crucial to always make your payments on time, as missing payments can significantly hurt your credit score and your chances of getting approved for a mortgage. So, if you do have a credit card, make sure to use it responsibly and pay it off in full each month to improve your credit score over time.
Don’t Run Close to Your Maximum Limit
Continuously maxing out your credit card or exceeding the credit limit can have a detrimental effect on your credit score, and it’s something you should steer clear of.
Check Your Address History is Keyed Correctly
Maintaining accurate information on your previous addresses is crucial to avoid appearing as though you’re living in two places simultaneously. This can occur if you enter incorrect dates of residency, such as overlapping dates or failing to update your address after moving.
Close any Unused Credit Accounts
If you have any credit or store cards that you’re no longer using, it’s advisable to cancel them. However, it’s worth noting that this action could have a temporary negative impact on your credit score.
By cancelling unused credit or store cards, you can simplify your credit portfolio, making it easier to manage and track your financial activity. This can improve your credit score over time by reducing the amount of credit you have available and your overall credit rate.
Remove any Previous Financial Links
If you’ve previously held joint accounts, mortgages, or loans with an ex-partner, their credit score could have an impact on yours. To prevent this, it’s important to inform credit reference agencies that you’re no longer associated with your ex-partner and remove any links.
To ensure that you’re well-positioned to secure the right mortgage for your individual circumstances, it’s recommended to keep an up-to-date copy of your credit report to provide to your mortgage broker in Manchester. This will enable them to build a complete picture of your financial situation and recommend the most suitable mortgage options for you.
Book Your Free Mortgage Appointment
As a dedicated mortgage broker in Manchester, we aim to find the best mortgage or remortgage in Manchester for your circumstances. The first step is to book a free mortgage appointment with a qualified mortgage advisor in Manchester, who will gather information about your financial situation.
With this information, we’ll search our various lenders to find you the most suitable mortgage product from the 1000s of mortgage deals available to us. Our team has an in-depth knowledge of mortgage criteria and we will guide you through your mortgage journey from start to finish.
Date Last Edited: December 11, 2023
