How to Improve Your Credit Score

Sian at Planet Mortgages

02 December 2021
By Sian

Worried about your credit score? We’ve compiled some useful information on the steps you can take to build your credit score and improve your eligibility for mortgages and other forms of credit.

Woman checking her accounts and wondering how to improve credit score
A credit score is one of the factors that lenders will consider when determining whether or not to approve your mortgage or loan application. By taking a look into your credit history, they’ll be able to see how reliable you have been when it comes to making payments on time and how much credit you have applied for and been granted or denied. 

Here at Planet Mortgages, we’re passionate about helping clients land their dream home and will search far and wide to find the best mortgage deal for you. As we mentioned above, your credit score is something that lenders will take into consideration. So, it’s important to ensure that your credit score is as strong as it can be. We’ve compiled some information on how to improve your credit score. 

Register on the electoral roll

Registering on the electoral roll allows companies to verify your name and address which is crucial when building your credit score. It’s important to do this even if you’re living at your family home or in shared accommodation. If you haven’t already registered, you’ll find that it’s a quick and simple process - and one that can help boost your credit score too! 

Build your credit history 

If you’ve never taken out credit before or if it’s been a long time since you have, you’re likely to have a ‘thin’ credit file. This is also sometimes referred to as being ‘invisible’ to the financial system. Having a thin credit file can make it difficult for companies to assess you and your financial situation. As a result of this, your credit score could be lower which could impact your mortgage application. If you’ve never had any credit, there are plenty of ways that you can build a credit score, you can read more about this in our How to Build a Credit Score blog. 

Be reliable and responsible 

Making payments on time and in full can indicate that you’re sensible with money and that you can manage your finances and debt well. You can demonstrate this by making any repayments on time and in full each month. 

Keep your credit low

Mortgage providers will look at your outstanding balance and how much credit you have available. This allows them to determine how much of a financial risk you are. Whilst taking out some credit is beneficial when attempting to build your credit history, it’s important not to take out more than you can afford. Missed, or late payments, can have a significant impact on your credit score. 

Avoid multiple applications 

Each time you apply for credit, it is noted on your credit report and this information is accessible to mortgage lenders. If you make too many applications in a short period of time, this can negatively impact your credit score. We’d highly recommend spacing out and limiting the number of credit applications that you make. 

Cut financial ties

If you have been financially linked to someone, for example you have had a joint bank account or you have applied for a mortgage together, then their credit score could be impacting yours. If your finances are no longer linked, you can contact credit reference agencies and ask for a notice of disassociation. This will stop their credit history affecting yours. 
Looking for a mortgage broker in Colchester, Essex? Get in touch with a member of the Planet Mortgages team. We pride ourselves on going above and beyond to ensure that our clients get the best mortgage deal possible. You can rest assured that we’ll be there to support you throughout your entire home buying journey.