Mortgage blog: Five credit tips if you’re looking for a new mortgage

Posted 9 April 2014

As the choice of first-time buyer mortgage deals increases, the number of people looking for a new mortgage has also risen. However, many lenders still have strict criteria regarding who they will and won't lend to.

Neil Munroe, external affairs director from Equifax, a credit agency, says: "The Mortgage Market Review...places even greater onus on the lender to assess affordability and an individual's credit information will play a crucial role in that assessment. We are, therefore, urging people planning to re-mortgage or move home to take a look at their credit information - before they start making applications.

"It's much easier to tackle any factors that might be affecting their credit status before making new applications, rather than having to address them once the process has started."

Your credit rating still remains one of the most important factors when a lender makes an underwriting decision. So, we've put together a guide to five credit tips that will help you to get your new mortgage.

1. Don't apply for lots of mortgages

Every time a lender makes an ‘application' search against you on your credit file it is recorded. When shopping around for a mortgage, a large number of searches will often be an adverse factor and can impact your ability to get a mortgage.

Ensure any enquiries at a lender are registered as ‘quotation' searches to avoid this issue.

2. Make sure your payments are up to date

Before applying for a mortgage, make sure all your payments on loans, credit cards and even mobile phone contracts are up to date. If you are in arrears or have missed any payments you may find it tough to get a mortgage.

3. Close any unused accounts

A lender will often look at how much credit you have available, even if you don't use it. So, consider closing credit card accounts that you don't use.

4. Get a copy of your credit report

Before you apply for a home loan it can be beneficial to obtain a copy of your credit report. There are three credit reference agencies that can provide this - Equifax, Experian and Call Credit - and you will be able to review the information a lender will see before you make your application.

This also allows you to correct any wrong information before you apply. And, if you have any adverse credit such as CCJs you can make sure these are recorded as settled on your file.

5. Register on the voter's roll

Make sure that you are registered on the electoral roll at your current address. This is one of the first issues that a lender will check to ensure that you are who you say you are.

Click here to find out more about how can help you find the right mortgage.



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