CREDIT
DON’T LET A POOR CREDIT SCORE TURN YOUR MORTGAGE DREAMS INTO A NIGHTMARE James Jones, Head of Consumer Affairs at Experian, looks at why your credit score is so important
best possible chance of success.” EXPERIAN CREDIT SCORE Experian’s score runs on a scale of 0-999 and is split into five bands: Very poor, Poor, Fair, Good, Excellent. Around 30% of Experian customers have an Excellent score. If your score is Fair or worse, your borrowing options may be limited.You can regularly check your score for free on the Experian website. MAKE SURE YOU’VE BUILT A CREDIT HISTORY A credit history can be thought of as a “file” of your recent borrowing behaviour. Some people have “thick files”, some have “thin files”, and some do not have a file at all. If you have never borrowed, you may have a
thin or non-existent file. This means lenders may struggle to predict how reliable you’ll be in the future. One way to tackle a thin file could be to take out a “credit builder” credit card, use it for occasional purchases and repay the balance in full each month.This could help you build a thick file in three to six months, depending on whether you have any other financial accounts on your report. Eligibility checking tools, such as on the Experian website, can help you find card deals you’re most likely to be accepted for, reducing your chances of applying for one you’re unlikely to be accepted for. HOW TO REPAIR A POOR CREDIT HISTORY While no two lenders have the same criteria, there are common factors that many agree
Buying your first home is incredibly exciting! From viewing your shortlisted properties, the butterflies that you feel submitting an offer, to the anticipation of waiting for a response from the estate agent. There’s nothing more thrilling than your offer being accepted – but that excitement could quickly turn to despair if, at the 11th hour, the mortgage lender refuses your application because your credit score isn’t up to scratch A poor credit history is one of the most common reasons for mortgage application problems. That’s why it is important to review your credit report and score before you start your new home search, giving you time to get your credit score in great shape. WHAT IS YOUR CREDIT SCORE? Your score is a three digit number that summarises your creditworthiness. It helps lenders determine whether you’re likely to keep up your payments.While there’s no universal score, public-facing scores are available to help guide you on how your past track record shapes up in the eyes of lenders, which can help you discover where you could make improvements. One such guide, the Experian Credit Score, is calculated using your Experian credit report, which many lenders consult.Your credit report covers the past six years and plays an important role in lending decisions. Experian’s James Jones explains, “If you’re planning to apply for a mortgage soon, it’s important to check your credit report early in the process. “If you do find a problem or something that needs work, you can address it before you invite the mortgage lender to put your report under the microscope.You might also identify other ways to improve the picture your credit history paints of your financial track record, to give your application the
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