Step 2 - Check your credit file

If you're looking to buy a home - keeping a close eye on your credit file is a must.

In this article you'll learn:

  • Just how important your credit record is when getting a mortgage for your new home
  • How to get a copy of your credit file and what to look out for

Have you checked your credit file recently?

One of the biggest obstacles you can face when arranging your mortgage are unexpected glitches showing in your credit file that can stop an application in it’s tracks. These are often problems you never even knew existed or entries you didn’t think were cause for concern.

Even if you know you have a squeaky clean credit history it is still advisable to get a copy of your file as it provides important information about any commitments you do have, such as; outstanding balances, start dates, no. of months remaining, etc.

Keeping an eye on your credit file is a must if you are looking to buy a new home anytime soon.

What do the credit reference agencies do?

  • They collect information about you and your commitments, such as: credit cards, mortgages, loans, electoral role information, etc etc.
  • They keep a record of how well you maintain your commitments and apply a ‘credit score’ according to this information.

How is your information used?

  • When you apply for credit, such as a loan, credit card or mortgage, the lender pays a credit referencing agency for your file and uses the information it contains, along with the information they have collected about you, to make a decision on whether they consider you the type of person they wish to lend money to. Therefore:
  • If you have a history of keeping up with your payments and don’t over stretch yourself you are more likely to have a high score and therefore more likely to be accepted for credit.
  • If you have missed payments or have defaulted on any of your commitments, your score could be lower and you may be declined for credit.

Things to look out for:

  1. Missed Payments:
    1. if you have missed or made a late payment within the last 12 months your chances of getting credit (especially a mortgage) is reduced considerably. For most lenders this would be a straight decline.
  2. Electoral Role:
    1. your credit score is massively reduced if you are not on the electoral role where you live. People who have had financial difficulties in the past often exclude themselves from the register to prevent those they still owe money to getting in contact.
  3. Excessive Available Credit:
    1. when applying for credit, lenders do not like to see large amounts of available money. An example of this would be if you had a credit card that you didn’t use that is showing as active on your file and has a £7,500 limit.
  4. Credit Searches:
    1. every-time you apply for a new credit card, loan or mortgage a ‘credit foot-print’ is left on your file. These footprints are visible to other lenders and remain relevant for around 12 months. If you have too many over this period it can adversely effect your ability to get credit.

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Help!...I've had credit problems

If you've had credit problems in the past - fear not, you have options

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The 'Essential 6-Step Guide' to buying your first home:
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Step 1 - Know your figures

If you don't know your figures, then you won't know how much you can afford.
Do you sums now and save time later

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Step 2 - Get your credit file

Ensuring your have a clean credit file is a must when your buying your first home.
Get your free file now

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Step 3 - Choose the right mortgage

Finding the right mortgage can be a minefield of options.
How to find your perfect mortgage

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Step 4 -Find a great solicitor

There's a HUGE difference between a good one & a bad one.
How to choose the RIGHT one

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Step 5 - Make an offer

Put yourself in the best buying position & blow the competition out of the water.
How to get your house...Fast

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Step 6 - From offer to completion

Keep control of your home purchase & make sure you're in the know.
Get informed - Take control

How to get your credit file
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There are 3 main credit reference agencies:

  1. Experian: www.creditexpert.co.uk
  2. Equifax: www.equifax.co.uk
  3. Call Credit: www.callcredit.co.uk

All 3 of the above credit reference agencies offer a FREE 30-DAY TRIAL so you can check out your report without it costing you a penny.

Although the companies are supposed to hold the same information on you with regards your credit commitments, in our experience, there are discrepancies as some lenders register information with one and not the other.

Remember; if your file is not up to scratch then you’re going to struggle to get you a mortgage.