Alex Sharp of GAM Home Loan Specialists writes about the process of improving your credit score in 2024.

One of the most important factors to a Mortgage Lender, when you apply for a Mortgage, is "How reliable is this applicant?"

They want to know you are going to pay for the mortgage they have provided you.

The Mortgage Lender will assess this "reliability" by using a Credit Check.

The credit check will provide them with a "score" but also very detailed information about your history.

How much money you owe? When you pay your bills? Who you have applied for credit to?

Check your credit file

The three main credit reference agencies are Experian, Equifax and Call Credit.

You can ask them directly for a copy of your credit report (a fee may apply). When you receive it, check everything's accurate and contact the agency if anything's amiss. We recommend using Checkmyfile.

Register to vote

You might find it harder to get credit and a mortgage if you're not on the electoral roll.

To register, go online and follow the steps.

For anyone ineligible (mainly foreign nationals), you can add a note to your credit file saying you've other proofs of address/residency.

Review unused credit cards or accounts and update your details

Having credit cards that you don't need will increase the amount of overall credit you have available and may impact your credit score.

Unused credit cards or large credit limits will reduce your credit score.

To ensure a smooth ID check, it's important that all active bank and credit accounts are registered to your current address.

Getting a mortgage may be harder if you are not on the electoral roll (image via SWNS)

Don't be late with payments

Your credit score will be better if you keep up the repayments on any credit agreements you have.

Late, missed or default payments or County Court Judgement (CCJs) will negatively impact your score, so always get in touch with your provider if you're struggling.

Establish a pattern of regular saving

Having savings may give you a buffer against unexpected events, helping you to avoid missing payments or increasing the amount you owe on credit cards or loans.

Stay out of your overdraft

If you're constantly using your overdraft this could be seen as living close to the edge of your finances, so avoid it if possible. In fact, some lenders may not tolerate you being in your overdraft at all in the last three months.

Avoid payday loans

Not just because their rates of interest are very high but because a few mortgage lenders simply reject anyone who's got such a loan as it indicates poor money management.

Break with past relationships

Write to credit agencies asking to be delinked from any ex-partner you had joint finances with.

This stops their credit history affecting your applications.

Build your credit score

If you have a poor credit score, it takes time to rebuild it. Perversely, one way to do it is to get a credit card and spend on it each month. This proves to lenders you can borrow responsibly. Yet only do this if you ALWAYS repay in full to avoid interest.

Time it right

Issues such as county court judgments for unpaid bills are wiped from your record after six years, so wait for that until you apply.

Credit Applications only stay on your file for a year, so if you've a raft of those (e.g. lots of credit cards) then wait.

Don't miss payments

Set up a direct debit to make at least the minimum repayment on credit cards so you're never late and never miss a month. It's always better to repay more, so make manual repayments on top when you can.

Keep other applications to a minimum in the months before a mortgage

Applications, whether successful or not, go on your file, so space out applying for anything that adds a footprint to your file (including car insurance and mobile phones).

The worst thing is a lot in a short space of time as it looks to the mortgage lender like you are desperate for credit.

Your home may be repossessed if you do not keep up repayments on your mortgage.

GAM HLS sponsors Kenilworth Nub News' Property Section

Without community-minded partners like them we would not be able to produce dedicated, clickbait-free news to the people of Kenilworth.