How to improve your credit score before you apply for a mortgage

illustration of How to improve your credit score before you apply for a mortgage

But one of the things you can do to strengthen your application is check your credit score (or credit rating) and see what you can do to improve it. 

In this guide you’ll find:

What is a credit score?

Your credit score is a number between 0-999. The figure you have will depend on which credit reference agency you use. But generally, the higher it is, the better your credit score is, the lower it is, the worse your score is. Your credit score is one of the things potential mortgage lenders will look at to decide whether or not to offer you a mortgage.  

Your score is affected by things like how many accounts you have in your name, how much debt you have and what your repayment history is like. 

Your credit score acts as a representation of your history with credit. It reflects the information in your credit report, such as loans, debt, credit cards, people you are financially linked to, and even whether you are on the electoral register. 

All of this info is used to create a score based on how healthy your credit report is. If you have a good history with credit, you will have a higher score. And things like missing payments on your bills can decrease your credit score.

While lenders consider a number of different factors when deciding if they’ll offer you a mortgage, a credit score is important. A low credit score might mean some lenders won’t give you one. But specialist lenders are more likely to offer you a mortgage because they’ll look at your situation in detail. This means they’re more likely to get the bigger picture of you as a person, rather than refusing you a mortgage based on your credit score alone. 

Credit scores aren’t fixed. They change over time. And there are many ways you can increase your score before you make a mortgage application. 

How to check your credit score

You can easily get a copy of your credit report from companies known as credit reference agencies. The three main ones are Equifax, Experian and Trans Union

However, they differ in what they show you. So for a detailed and thorough overview of everything in your credit record, go to checkmyfile. Checkmyfile shows you the information from all three credit checkers on the same report. And you can download your report for free with a 30 day trial. 

Credit score checker

Each credit reference agency measures credit scores slightly differently on a numbered scale. This guide shows you how each agency will show you your credit score a little differently, and what ‘excellent’ to ‘very poor’ scores look like.

Experian Equifax TransUnion
Excellent 961-999 466-700 628-710
Good 881-960 420-465 604-627
Fair 721-880 380-419 566-603
Poor 561-720 280-379 561-565
Very Poor 0-561 0-279 0-550

10 tips to improve your credit score

Here are 10 top tips to improve your credit score if you’re thinking of applying for a mortgage. Once you’ve accessed your credit report or file, these tips will help you get the best chance of being approved for a mortgage. 

Check your credit report

Have a look at your report in detail and check if everything looks correct. It’s possible for errors and mistakes to be made, so if something doesn’t seem right, it’s worth investigating. If you spot something that doesn’t look right, like a late or missed payment, contact the company that has billed you incorrectly to put it right. 

Double check your personal information

This one might seem pretty obvious, but all your information on your credit report or file has to be accurate and up-to-date to get an accurate credit score. If there are mistakes in your name, address, date of birth, or other personal information it can impact your credit score. Check your address is up-to-date (this one can often be wrong if you’ve moved in the last few years) and for any spelling errors on your info. If you do spot any mistakes, report it to the credit reference agencies.

Make sure you’re registered on the electoral roll

Being on the electoral roll means you’re registered to vote in your local area. Being registered makes it easier for lenders to prove your identity and your current address. So double check you’re registered under the correct info, and it’ll work in your favour when you’re applying for a mortgage. To check you’re on the electoral register go to this gov.uk page about registering

Reduce your use of credit 

Using credit responsibly can have a positive impact on your credit score. But when you’re applying for a mortgage, it’s good to check how much credit you’re using. And you should avoid spending up to your limit on credit cards. Mortgage lenders like to see you can use credit responsibly. And they also take into account how many other credit type bills come out of your account every month when they work out the kind of mortgage you can afford. 

Consider your credit accounts 

If you have a credit card or account that you no longer use, you may think it makes sense to close the account. However, unused accounts can work in your favour as they count towards your overall credit limit but help to keep your credit utilisation ratio down. Lender like to see responsible use of credit in your credit file, so it’s good to have some accounts open as long as it’s always affordable for you to pay the money back in a timely way each month. 

Watch out for fraudulent activity

There are people out there who take out loans or open up bank accounts in the names of other people. Sometimes that can go undetected, but affect your credit score. When you look at your credit score and credit report, check everything on there is things you recognise. 

Make sure your name is on your bills

If you’re paying any household bills but your name isn’t on the account, it won’t be counting towards your credit score. Often, a household bill can be one person’s name, even if numerous people live in the home. So you could be paying on time, but this good behaviour won’t count towards your score if your name isn’t on those accounts. 

Spread out any credit applications

Avoid making lots of credit applications in a short space of time. When you apply for credit, lenders will carry out what is known as a ‘hard search’ on your credit history which is then noted in your report. A hard search is when a lender looks in detail at your credit score and file. A hard search stays on your credit file for 12 months, so if you have a number of these hard searches in a short space of time, it can appear to lenders that you’re trying to get a lot of credit. To them,  that suggests you might struggle to manage your money. So if you need to take out credit of any kind, just consider how many applications you’re making. 

Check your financial links to other people

Your credit report includes financial links you have to other people. If you’re linked to someone who has poor credit, this can negatively impact your score. You might be linked to financially others if you’ve ever shared a joint account or credit card with someone else. If you don’t need to share an account anymore, it’s best to remove yourself from those accounts if you can. 

Check your credit score regularly

Checking your credit score and credit report on a regular basis is a great way to stay on top of any issues or errors that may come up. It’s also great to keep track of how it improves. Always check your credit report before you make any applications for credit. That way, you’ll see what the lender will see and know how likely you are to be accepted. This can help you avoid getting rejected for credit applications because that can damage your credit score.

WE MAKE MORTGAGES POSSIBLE

50% of mortgages for people who are self-employed or have bad credit aren’t available directly to you. They’re only available through specialist brokers. Using our platform guarantees you’ll be matched with a broker who has a proven track record of making mortgages possible for people like you. Less processing, more understanding.

useful links

Our guides

Applying for a mortgage or understanding your options shouldn't be confusing, yet there are just so many myths doing the rounds and it's not easy to know where to turn to get the right advice.

Our Calculators

Our calculators give you an idea of what you might be able to borrow, what's affordable and a rough estimate of the kind of property prices you can start to look at.

review io logo review io 5 stars

Get connected to a 5* specialist mortgage broker who can make a mortgage possible.

Haven't we met before?