The UK property market has seen slower growth in recent times, with the mortgage sector particularly stagnant. But the good news is that the market is starting to be driven by first-time buyers, bucking historical trends. I read that last month saw 35,000 first-time buyer mortgages going through and these successful applications accounted for a value of £6.1 billion, which just goes to show the increasingly influential role of first-time buyers in the current market.
This trend has been triggered by a number of factors, from the rise of affordable online agents to increasing levels of awareness amongst younger buyers. I personally think it’s because we’ve all been saving for the last 10 years and can now finally afford that massive deposit! Having recently bought my first home, I thought I’d share some tips with aspiring first-time buyers to help you improve your credit score so that when the time comes you’ll be ready to buy!
REGISTER ON THE ELECTORAL ROLL
It’s amazing how much even relatively simple measures can boost your credit score. Registering on the electoral roll at your current address is one of the easiest things you can do to bump it up. Being reistered to an address makes a huge difference on your report and the viability of your loan applications, and if you’re not registered on the electoral roll you’ll find it far harder to source credit for an array of different products. Fortunately, it’s relatively easy to achieve, as you can register to vote on online or through the post as soon as you’ve recognised this missing information on your credit report.
REVIEW YOUR CREDIT REPORT FOR MISTAKES
There are other seemingly small details that can impact on your credit score, including the people that you’re financially linked to and any administration errors that exist on your report. You may find that a wife’s or family members’ credit rating is linked to yours, either through joint accounts or guarantor loans. This can either have an adverse or positive impact on your credit score, but you’ll need to review these associations before applying for a mortgage.
Mistakes and fraudulent activity can also impact on your credit rating, from a typo in your address to credit accounts that have been hacked. Similarly, some accounts may remain longer on your report longer than they should, and correcting this type of error can help increase your score.
GET SOME CREDIT!
While it may seem counterintuitive to seek credit when you’re looking to improve your score, or saving money for a deposit, there are instances where it will have a positive impact on your score. Specifically, regular and successful credit transactions reflect well on your report, as they prove that you can be trusted to borrow money and make timely repayments. As someone who had little-to-no credit history before getting a mortgage, I needed to ‘prove’ that I could be trusted with borrowing money by getting a credit card.
Using a “credit builder” card can be used for small but recurring payments – just make sure that you put money aside from your bank account to settle the debt every single month. This can have a huge bearing on your score, particularly if you’re looking to build on a poor or limited credit history. Likewise, if you use the credit card and don’t pay off the balance each month or end up with late-payment charges, it’ll negatively affect your score so make sure you pay it off!
Let me know if you’ve done any of these things in the past and whether they’ve improved your credit score? Any other tips to share on the subject of mortgages, house-buying or credit scores? Please leave me comment below!