One of the most important things to check before applying for a mortgage is your credit report, it gives you a clear picture as to exactly how the financial world sees you whenever you make an application. We have answered some of the most common questions that we get from our clients when it comes to their reports:
What does my report look like and how is it calculated?
Your report breaks down what payments you have made to your accounts over the last 6 years, from this history you will be given a score which is normally between 0 and 999. Both your score and history are things that lenders look at when judging whether to accept your application or not, generally the higher your score the greater chance of your application being approved.
Why is it important to check my report?
It is important to understand your report before making an application, you will be able to see everything that a lender will when they assess your application. Knowing what your report looks like prior to applying will help you avoid any shocks from your application being declined and it gives you a chance to put anything right that s impacting your score.
What can I do if there is something on my report that should not be there?
If there is something on your credit report that you believe is there in error, the best thing to do is to speak with the company that the error relates to. They should be able to discuss this with you and explain why they have added it to your report, if they have made a mistake they will also be able to remove it.
How do improve my score before applying?
There is not a quick fix to improving your score which is why it is important to understand it in advance of when you are looking to apply. Some of the best things that you can do is to make sure that you are on the voters roll at your home address, keep the number of ‘hard’ credit scores to a minimum 6 months before applying and make sure all of your commitments are paid on time and for the right amounts.
What is the difference between a ‘soft’ and ‘hard’ credit search?
The type of credit search a lender makes against your report can have an impact to your score, it is important to know what type of search they are doing before the lender does it. A ‘soft’ search will give the lender a snapshot of your credit history, this will normally flag anything that the lender may not like. This type of check will show on your full report but does not impact your credit score. A ‘hard’ credit search is conducted when you formally apply for credit, this will impact your score and to many of these in a short period of time will have a negative effect to your overall report.
Can I still get a mortgage if my report is not very good?
There are a number of lenders that will help people who have had issues in the past. They will need to understand exactly what the issues have been, when they were and the amount they were for. Lenders also have very particular rules as to what they are happy to accept and what they would not be. For these reasons, it is important that you have an up-to-date copy of your full report so any issues can be identified before making an application and potentially affecting your score further.