Select Page

Over two thirds of men and women considering trying to get a mortgage don’t know their credit that is current score

By Mortgage Information Bureau 23rd October 2019

Analysis from Mortgage guidance Bureau (MAB) has discovered that over two thirds of individuals who will be looking at obtaining a remortgage or mortgage don’t know very well what their credit history is.

The study discovered that customer understanding around fico scores differed by age bracket, suggesting that the older the respondent, the not as likely these people were to understand their present credit rating.

Overall, MAB’s research found 61 percent, for the 1,000 surveyed participants, didn’t understand how to discover what their credit rating is. Over half (57 %) of 25 to 34 12 months olds polled – who will be almost certainly become very first time purchasers – didn’t understand what their present credit history is, and 62 percent of 35 to 44 year olds, probably be going with their 2nd home sufficient reason for aspirations to rise the housing ladder up, weren’t alert to their present credit score either.

Two thirds of participants aged 45 to 54, the team almost certainly become trying to get a remortgage, had been also unacquainted with just exactly just what their credit rating ended up being.

How come your credit rating very important to obtaining a home loan?

Legislation around home loan lending changed dramatically in 2014 and for that reason, lenders are in possession of introduced affordability that is stringent and requirements for borrowers. Within the home loan application procedure, loan providers review potential prospects fico scores; in other words, people that have a far better credit history are noticed as a diminished borrowing danger and possibly implies that more competitive rates could be around.

In practical terms, people that have a great or exemplary credit rating have the ability to submit an application for a number of the cheapest home loan prices available, whilst individuals with a bad credit history or unfavorable credit rating will likely spend a greater rate of interest, and will possibly likewise require a more substantial deposit to secure a home loan, if certainly they can effectively submit an application for one after all.

Brian Murphy, mind of lending for Mortgage Advice Bureau, commentary in the findings regarding the study, “The need for a credit rating whenever trying to get a home loan shouldn’t be underestimated, as alongside earnings, it is one of the primary items that numerous loan providers examine whenever processing application.”

Credit rating top tips

Lenders understandably exercise care with regards to evaluating possible borrowers for a home loan, and financial records will always evaluated included in the financing procedure.

Businesses including Experian, Equifax, CallCredit and Clearscore will be able to give you a comprehensive report of most your credit records, including outstanding loans and any missed or belated payments over the last six years

There are many ways that are simple can enhance and nurture your credit rating, as an example:

  • Make sure that you’re registered in the Electoral Roll during the address that is correct
  • Make use of any credit or shop cards responsibly; don’t simply make the minimal payment every month to program the interest, make sure that you’re taking actions to clear any outstanding balances as quickly as possible.
  • Always make your repayments for just about any signature loans, charge cards, bills and cell phone bills on time; in the event that you belong to arrears or make belated re re payments, these may affect your credit history
  • Stay away from ‘Payday Loans’ as these are really a flag that is red numerous lenders that you’re unable to handle your private funds efficiently, even although you’ve compensated your debt back complete in the timescales agreed
  • For those who have a credit that is poor, stop trying to get more credit and just just take expert advice on how working towards fixing your credit rating
  • Don’t keep unused credit and shop cards; in the event that you’ve got a credit or shop card in your wallet which you don’t usage, cancel it. Lenders are cautious with borrowers accessing an excessive amount of credit, also when they aren’t deploying it right now, as it can certainly imply that they rack up debt at a later time, that may impair their capability to program their home loan repayments.

About Mortgage Guidance Bureau

Home loan information Bureau may be the UK’s most mortgage that is recognised brand*, winning over 70 national honors for the quality of their advice and solution over the past 5 years.

It’s over 1,350 advisers providing expert home loan and security suggestions about an area, local and nationwide degree to consumers, both in person and on the phone. Home loan guidance Bureau handles over ВЈ14bn of loans yearly, and had been the very first – and is presently really the only – mortgage intermediary to possess floated regarding the London stock market, having accompanied the choice Investment Market (AIM) in November 2014.