Help to Buy: ensure your credit history is up-to-date
Chancellor George Osborne announced plans in his Budget statement yesterday to make home ownership a reality for people across the UK
However, in announcing the ‘Help to Buy’ initiative, Osborne placed emphasis on continued responsible lending practices by mortgage providers.
Neil Munroe, external affairs director of credit information provider, Equifax, said: “George Osborne was quick to highlight the importance of responsible lending and called for financial services providers to focus on ensuring that people only take on affordable levels of debt. With only a small deposit, buyers could afford a substantial mortgage, making comprehensive credit checks crucial.”
Lenders make checks with credit reference agencies to see whether an applicant has kept up to date on repaying their credit. Having several credit cards with high limits and missing repayments can be cause for concern for lenders and could give the impression the person is financially stretched.
“For that reason it’s important an individual’s credit information is completely up to date – giving them the best chance of getting a good mortgage dea,” Munroe added.
“We are, therefore, urging homebuyers to review their credit history before they apply. Then at least they can spot any information that might need updating – such as being registered on the electoral roll – to put them in the best position to get a good deal. And if they are declined or offered a less favourable rate they will be able to ask the lender the reasons why, fully armed with the knowledge about their own credit history.”
|TOP TIPS TO IMPROVE YOUR CREDIT SCORE
1. Are you Registered?
2. Are you credit active?
3. Change of Circumstances
4. County Court Judgments (CCJ)
5. Stop Applying
6. Avoid a high balance
7. Be Direct
8. Close it Down
9. Early Bird Catches the Worm