Head of Content
Mortgage Advisor & Director
Improve your credit score - 5 tips
If your credit history could be better, you're not alone. Many people in the UK struggle with a poor credit history and do not know what to do about it. Why does it matter? Credit history is used by lenders such as mortgage providers or credit card companies to make a judgment about your ability to pay back money.
A poor credit score could stop you from being approved for the right mortgage or could mean you are offered less favourable interest rates. Your credit score affects your life in more ways than one. So it's important that if your credit score isn't great, you take steps to get in shape before applying for your mortgage - if you can.
If you want to raise your credit score, keep reading. We've got some easy-to-follow advice that could help improve your creditworthiness and boost your chances of being approved for your ideal mortgage.
What are 5 ways to improve your credit score?
Here are a few ways to improve your credit report:
1. Pay all bills on time - including loans, credit cards, and other accounts. This will show lenders that you're a reliable borrower and control the debt you owe.
Lenders will look at your credit payment history, and if you've been keeping up with your bills, this will serve as a good indication that you're well-behaved and responsible. Missed payments, especially if they show a pattern on your credit file, will ring alarm bells for mortgage lenders.
Credit scores are also weighted to take into account how late your payments were. If you've missed one or two in the past, don't panic - it may not make too much difference.
But if you're constantly getting behind on bills, this will undoubtedly work against you when lenders are deciding whether they want to give you money.
2. Don't apply for too much credit at once - as this can indicate you are struggling to make ends meet with your current income and expenses. A good credit score means balancing your credit mix and making sure your credit card balances are within limits.
Credit scores are designed to measure the 'creditworthiness' of a person, and the amount of credit you are using is a big factor that lenders will be looking at. Your credit limit is also an indication of your creditworthiness - if your limit is higher, it shows that you have a good track record in repaying debts.
3. Reduce your debts when possible - A good credit score isn't just dependent on what you owe; it's also influenced by how much debt you have compared to your income and available credit.
Over time, if you're in control of your credit applications and repayments responsibly, you'll see your credit score rise.
4. Check your credit history - Regularly checking your credit history is very important if you want to make sure it's up-to-date and accurate.
So, how do you check your credit report? Well, there are a couple of ways. You can make a free account with one of the main credit reference agencies like Equifax or Experian. From there, you can check that there are no errors in your credit history.
5. Keep using your credit cards, but don't overdo it. It would help if you aimed to use credit and make repayments in full each month. Credit scores are calculated, amongst other things, the amount of credit you have compared to how much you use. So getting a limited credit card and using it will build up your score, but don't go overboard - especially if you already have other types of debt.
Bonus: Get on the electoral roll - Finally, it's worth remembering that registering to vote at your current address will improve your credit score in the eyes of lenders.
Credit Report FAQs: What is a credit score?
A credit score is your financial reputation, it's basically how financially trustworthy you are. Credit scores are a three-digit number, higher is better and indicates your creditworthiness, and varies depending on the credit reference agency.
Your credit report looks at how well you've managed your finances over time - including whether you've been diligent in paying off debts if you have any late or missed payments recorded on your file.
How do I check my credit report?
There are a few ways to check your credit report. You can check your file with the three main credit reference agencies, they're known as Equifax, Experian, and TransUnion.
What affects my credit rating?
Your credit rating is affected by many things, including how well you've repaid your debt in the past, your credit limits, and your debt types.
Can I check my credit score online?
Yes, you can, and it's free to do so.
What is a good credit score?
A good credit score varies depending on who you speak to! A higher credit score with one credit reference agency can be seen as a lower score with another, so it's important to check your credit score regularly.
Get started on your mortgage journey with us
I found an error on my credit report; what should I do?
If you find an error on your credit report, don't panic. You can contact the credit reference agency in question, and it's easy to raise a dispute.
When can I check my credit score?
You can ask for your credit report any time you want, making sure the reports are correct before you apply for a loan or finance product is important to ensure you get the best deal possible.
How often should I check my credit rating?
Experts recommend checking your file regularly; checking your file once a month will allow you to keep track of any changes in your credit score or how much you owe.
How do lenders decide my credit limit?
Your credit limit is determined by a variety of things, including how you've managed your credit in the past and your credit utilisation. Whether or not you use all of your credit limit offered by lenders, all the types of debt you have are taken into consideration.
Get a mortgage in principle in minutes!
With Teito, you can find the best deals from hundreds of lenders quickly and easily because we partner with the top UK lenders to give you a competitive mortgage in principle on your property.
Even with a less-than-perfect credit history, we can help! As a whole of market service, we work with mortgage providers who will offer competitive rates even if you have been refused finance from other lenders in the past.
Get started now and find your perfect mortgage in minutes!
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.