Having a bad credit history can affect your ability to buy a house as mortgage providers have extremely strict criteria that you need to meet for them to extend you a loan. Given the large sums of money involved, they want to know that you are a good candidate who will repay the mortgage over time.
Improving your credit rating can therefore be extremely helpful when trying to buy a house. In addition to taking out a loan to prove that you can pay back debts, there are other ways that you can help your credit history if you have missed payments in the past. For example:
It is highly recommended to register on the electoral roll if you have not done so already. Doing so gives mortgage providers, and other lenders comfort that you are a stable candidate who can be found if needed. The risk of you absconding away is diminished if you have registered to vote.
Do not always max out credit cards. Mortgage providers, in particular, frown upon this as it means they see you struggle to use your income as the only form of covering expenses. It is thought that keeping your credit card spending below 25% of your credit limit is what mortgage providers are comfortable with from prospective customers.
Think about settling any debts or outstanding invoices. If you have several, it could be a good time to consolidate debt by using a loan with a reputable provider such as us at The Money Shop. Plus, what’s great about consolidating debt is that it often lowers your interest payments, making it easier to pay off any loans too. You’ll do it more quickly – thus leaving you with more funds at the end of each month. Those funds can be put into savings for your deposit.
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