In these times of economic uncertainty, many of the major lenders have made it much more difficult to obtain credit, particularly when it comes to securing approval for a home loan. Consequently, having a good credit score is really important if you're to be successful in your application. Luckily, there are ways to improve your credit score to increase your chances of being approved for a loan or mortgage. Read on to find out more.
Make sure you're on the electoral register
Lenders use the electoral role to check that you are who you say you are, and you may not be on the electoral role if you've recently moved house. Make sure that you register with your Local Authority to ensure that your change of address features on your credit report. If you are a foreign national, you'll need to send proof of your address to all the relevant credit reference agencies.
Put right any errors on your credit report
A simple error can drastically affect your chances of being given credit approval. Check your credit report carefully, and notify the credit reference agency immediately if you discover any discrepancies; they are duty bound to make any necessary amendments.
Use the right name
If you've changed your surname and it's not linked to your old one, your credit score could be adversely affected. You can link any 'aliases to your original name by contacting the credit reference agency.
Break links to others with bad credit
Being linked to someone with a poor credit history can adversely affect your own score, for example, if you hold a joint credit card with a partner who has previously been bankrupt. In such circumstances, it's a good idea to keep your finances completely separate.
Keep credit applications to a minimum
Every time you make an application for credit, the request is recorded on your credit report as a 'footprint'. Too many footprints make it look as though you have been declined for credit many times in the past, which may put off prospective lenders.
One of the best ways to secure a home loan is to show prospective lenders that you are a reliable borrower who will make their repayments on time. You can do this by showing that you have lived at the same address for a long time, that you've banked with the same bank for many years, or that you have a secure job, which you have had for a good length of time.
You can increase your chances of being successful in your application for a home loan by employing some of these techniques to help improve your credit score. Remember to always make repayments on loans, credit cards and store cards on time and in full to further increase your chances of success.