Your credit score measures how likely you are to pay back money that is lent to you. The way your score is measured is more complex because many elements of your financial behaviour are used when compiling it.
Experian runs one of the biggest databases on consumer credit and is one of several organisations that will tell you your credit score.
For independent advice, take a look at the government’s Money Advice Service Website, which has a section on improving your credit score.
You could also talk to a trusted local source, such as an Estate Agents Cheltenham company, who can give you unbiased advice and help you start looking for the right property for you at the right price at sites including meandyouestateagents.co.uk.
Meanwhile, use these tips to start improving your score and help you get the mortgage you want.
Monitor your balances
If you’re using every penny of your credit card balance each month, it will lower your score. Lenders like to see you using only about a third or less of the amount you have available. Otherwise, they will think you are financially stressed. Try not to use your credit card more than absolutely necessary.
Get rid of small amounts of credit
The more cards you have, the more points will be deducted from your total score. If you have small balances on several different cards, get rid of these first so you can close them completely.
Don’t get rid of good debt
If you have a debt, such as a car, that you have dutifully paid on time, don’t make it a priority to pay this off if you get a sudden windfall. Debt that has been handled responsibly is good for a credit score.
Always pay on time
Paying your credit cards and loan payments on time is crucial. In fact, it’s one of the key indicators that lenders look at. Don’t forget that the score is based on your credit report, so it’s not a snapshot; it’s more like a diary of how punctually you’ve paid over the past years.
Don’t make yourself look risky
Are you thinking of running an online gaming account via your bank or credit card? That’s not a good idea until you’ve got the loan or agreement you want. The same goes for any other activities that a lender might think are risky.