Improving Your Credit Score

There are many factors involved in a mortgage lending decision, not least the status of your personal credit score. It could be that you’ve either had bad credit in the past or, as is sometimes the case, you’ve got no credit history at all. In both senses, if you want to be seriously considered by mortgage companies, this is something that needs to be improved.

The good news is that there are a number of things that can be done to improve your rating. They all take a little time, but the effort will all be worthwhile when that all important mortgage offer comes your way.

Bad Credit Credit Cards

Even though you might not feel like doing so (especially if you’ve had money problems in the past), taking out a Bad Credit credit card, like a Vanquis Bank can really help you boost your score. How you use it is important too, as we’re absolutely not suggesting that you max it out, because this helps no one. You should maintain your balance at around 15-20% of your total available and pay it off each month, on time, without fail. Operate this credit in this way for a number of months and you’ll see some real positive, upward movement of your credit rating.

Savings Based Credit

If credit cards aren’t your thing, then there are other options available. Some people prefer to operate something called a Loqbox, which is a financial product that you pay into each month. Technically speaking, it’s a credit agreement, but it also closely resembles a savings account. You even get all the money back that you’ve paid in at the end of the 12 months and each payment you make, is seen by the credit reference agencies as a regular payment for credit. This is a very popular, low risk method to give your credit score a jump start.

Avoid High Cost Credit

Whilst it can be helpful to obtain credit to improve your rating, the same can’t be said for high cost credit, such as payday loans, text loans and doorstep loans. Even if you pay the money you borrow back on time, every time, it’s not going to have the same effect as doing so with other types of credit. The reason being that high cost credit is seen as an emergency measure that’s indicative of a person who runs their credit erratically. Our advice is to give this type of credit a wide berth, not least because of the horrendous rates of interest you’ll pay.

What mortgage lenders are looking for is a stable set of finances, so whatever you do to improve your credit score, do it steadily and slowly, as you’ll have much more in the way of success.

Complex Mortgages don't have to be difficult.

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