Who’s Keeping Score: How to Uplift Your Credit Rating

Woman with calculator and comupter checking her credit score

It’s fair to say that most of us probably don’t keep a constant check on our credit score. However, when the time comes to apply for a mortgage, you want to ensure there are no surprises that could hinder your application. This handy guide is here to provide you with the understanding of how you can control and enhance your credit score with a little bit of patience, dedication and know-how.

First, let’s clarify what a credit score is – it’s a numerical representation of your creditworthiness, used by lenders to assess the risk associated with lending you money. A high score represents less risk, meaning you’re more likely to be approved for loans and mortgages, often with more favourable rates.

Below are 8 key factors to understand to allow you to control and enhance your credit score:

  1. Understand Your Credit Report:

In the UK, three main credit reference agencies compile credit reports: Experian, Equifax, and TransUnion. Each has a slightly different scoring system but generally, a higher score is better. You’re legally entitled to see your report for free. It’s important to review the report and contact the respective agency if you note any discrepancies.

  1. Stay Prompt with Payments:

Your payment history significantly influences your score. Try setting up direct debits for fixed costs to ensure you never accidentally miss a payment. Keeping up with repayments not only improves your score but also paints you as a reliable borrower to future lenders. Regularly missing payments for loans, credit cards, mobile phone contracts or even your utility bills can negatively affect it.

  1. Manage Your Credit Utilisation:

Credit utilisation refers to how much of your available credit you’re using. If your credit limit across all your cards is £5000, and you’re consistently using £4500, this signals high dependency and can harm your score. It may feel counterintuitive, but under-utilisation (not using any credit) isn’t great either as it provides no proof of you responsibly managing credit.

  1. Credit Building Credit Cards:

If your credit score is on the lower end, consider applying for a credit-building credit card. These have higher interest rates but are easier to obtain with a low score. The key is to make small purchases each month and pay the balance in full and on time. Over time, this can significantly enhance your score.

  1. Limit Hard Credit Checks:

Each time you apply for credit, the lender conducts a credit check which leaves a footprint on your report. A soft footprint can only be seen by yourself and the lender, however, a hard credit check will leave a footprint that can be seen by all lenders on your report for a year. It is important to ensure that you limit the amount of hard credit checks that you undertake as this can negatively impact your credit score.

  1. Register on the Electoral Roll:

An easy but vital step in boosting your credit score is registering on the electoral role. Being on the electoral roll makes it easier for lenders to confirm your identity and address, thereby improving your credit score. You can register online, by post, or in person.

  1. Your History and Stability Matters:

Lenders appreciate stability. This includes having a fixed address for a significant period, being employed by the same company for a considerable time, and regularly depositing money into savings. A longer credit history, especially with well-managed accounts, can also increase your score, so keep long-standing bank accounts open, so long as they are not incurring any fees. If you’re young or new to the UK, you can build your credit history by taking out small forms of credit, like a mobile phone contract or credit card with a low limit – over time your credit score will improve.

8. Address Financial Links:

Lastly, be mindful of any financial associations you have with others. If you share a financial product with someone who has poor credit, it could impact your credit score. You might want to break these financial links if the other person’s credit history is negatively affecting your score.

Improving your credit score in the UK involves a combination of responsible financial behaviour, smart use of credit and regular monitoring of your credit report. Enhancing your credit score is not an overnight journey, it requires patience, persistence, and positive habits. But, with consistency, you’ll see your credit score rise, unlocking new financial possibilities, including a mortgage!

If you have any questions about the process of applying for a mortgage, or you’re ready to move forward with an AIP (we can usually do this for you within 30 minutes) or mortgage application, give us a call on 01527 222 694. Alternatively, click here and we’ll get someone to contact you.



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