Before deciding to buy you will need to know that your credit score will allow you to access a mortgage product that will allow you to buy.
You can check your credit score for free at Noddle.co.uk
This will give you an indication of what information is held by credit rating agencies who mortgage lenders will use to give them an understanding of the level of risk that they are taking on by lending you a large sum of money you will need to buy your first home.
Developing an ‘excellent’ credit rating will allow access to better value mortgage products as you are seen as being less risky and more likely to not default on the loan.
That old phone contract that you forgot to pay, maxed out credit cards and short term loans are all things that might be detrimental to your score so understanding what the credit agency have on you in advance will allow you time to make sure all your details are accurate.
If you have ever been declared bankrupt, been subject to Inficidual Conuntary Arrangement (IVA’s) these can be seriously detrimental to your chances of getting a mortgage, however, there may be lenders willing to offer you a mortgage product. However, due to the higher risk, this presents you may find yourself paying a higher interest rate.
Steps you can take to improve your Credit Rating
- Cancel unused credit cards
- Never miss payments on loans, credit cards or utilities
- Ensure you are on the electoral roll of your current property
- Get a Credit Card and use it responsibly, remember credit needs to be paid back!
- Don’t open any joint accounts or loans with a partner with a poor credit rating as this could detrimental to you own score
- Ensure accuracy by checking your credit report does not contain any anomalies which may result from identity fraud, administrative errors by lenders etc.