Tips to improve your credit rating

14th March 2017

Buying a house is known to be one of life’s biggest stresses but with even tougher checks on personal finances since the financial crash, it’s worth planning as far in advance in possible.

 

If you are a first time buyer, you will need to start saving or if you are lucky enough to have support from family or friends to put down as a deposit you will still need to have good credit rating. If you have never applied for or had a credit card, then it is worth doing this to build up your credit score. Just ensure if you do spend on credit cards to make at least the minimum monthly payment, or clear the balance every month.

 

If you already own your home it is still important to pass the credit checks. Always keep on top of mortgage repayments and ensure they are paid on time.

 

However, just keeping up with your mortgage repayments isn’t enough if you have other credit and haven’t kept up with the payments, had a default or overspent.

 

Everyone has a financial CV and credit rating and it will be checked for anything involving credit – mortgage, store cards, mobile accounts, car insurance and energy bill contracts.

 

Eligibility for credit comes down to specific lenders and will look into other factors such as income, dependents in your household, other credit agreements and affordability.

 

Choosing a mortgage can cause so much confusion, with hundreds to choose from, all with different benefits and offering different terms. You can choose from fixed, variable or discount and trackers. The term can be from two years, three years, five years and ten years fixed, variable or discounted.

 

With the era of Trump and Brexit it may be your preference to choose a longer-term fixed rate mortgage so that you know a set amount of what you will pay every month and over the next 10 years and be safe in the knowledge that it won’t change, even if interest rates were to rocket.

 

It is difficult to predict what might happen and some would prefer to lock into a shorter two or three year deal and then look to take out a new deal as it comes to an end rather than reverting to the standard variable rate (SVR).

 

Money Saving Expert has plenty of information and explains the various types of mortgages in-depth.