Published On: Mon, Sep 2nd, 2019

Mortgage calculator: Credit expert warns check credit report before applying for mortgages | Personal Finance | Finance

From the best rate to the type of mortgage which suits the borrower, there’s a lot to think about when getting a mortgage. Some people may opt to use a mortgage calculator tool online. However, it may be that potential house-buyers may want to consider their credit score, too. This is a number which is used by lenders, to help determine whether a borrower can qualify for a particular type of loan – including credit cards, loans, and mortgages.

It can be provided from Credit Reference Agencies, and is available for individuals to see.

Lenders may look at a person’s credit report in order to see the applicant’s credit history, before determining a credit score of their own.

This report is a record of credit that one has used in the past six years, as well as other relevant records.

These can include the electoral roll, court judgments, insolvencies and credit applications.

James Jones, Head of Consumer Affairs at Experian, told “For many of us, applying for a mortgage is the most important application we ever make, so it’s worth being prepared.

“This includes investing a little time in reviewing your credit score as early as possible in the process.

“This will give you time to iron out any issues and, if necessary, grow your score to give you the best possible chance of securing a great mortgage deal.”

What tips does Experian have for mortgage hopefuls?

For those applying to a mortgage, they suggest it could be sensible to review one’s credit report with each of the three credit reference agencies as soon as possible – ideally at least six months before a purchase.

Research conducted by Onepoll suggests that 74 per cent of UK homeowners didn’t check their report before applying – which, according to Experience, could mean their credit scores may not have been as good as was possible ahead of applying.

And, the credit reference agency has suggested that this could have left some with limited – and more expensive – mortgages to choose from.

READ MORE: Cheap mortgage: Why cheap rates may not always be best deal – watch out for two key words

How to make sure one’s credit health is in shape when buying a property, according to Experian:

Check your credit report to ensure everything is accurate and up to date.

Even minor discrepancies can affect a person’s credit score.

See if you can strengthen your credit history, and further improve chances of being accepted for a mortgage

  • Register to vote at your current address
  • Make sure any past debts are correctly shown as paid and closed
  • If you’ve had problems in the past for a good reason, such as losing your job or being ill, send a ‘notice of correction’ to the three credit reference agencies to explain this to enquiring lenders
  • If your credit report is still linked to an ex-partner’s, ask the agencies to break the link for you
  • Try to avoid applying for other credit products in the six months before your mortgage application
  • Avoid missing any regular payments as these are likely to damage your credit score
  • Pay down existing debts if you can. Maxed out credit cards are bad news for credit scores

Check out which mortgage products you’re likely to be accepted for and how much you could borrow, based on lenders’ criteria via an eligibility checker.

This check leaves only a soft search on your credit report so does not impact your credit score and you get to see where you stand based on your current credit health.

You can get as many mortgage quotes as you like without harming your credit score.

However, be aware that as soon as you ask a lender to commit to lending to you, including getting a mortgage ‘agreement in principle’, this is likely to register a hard footprint that can affect subsequent credit scores. So only do this once you’re found the right deal for you.

Once you get your mortgage, keeping up with the monthly payments will further strengthen your credit rating.

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