How to Improve Your Credit Score Before Applying for a Mortgage

When assessing a mortgage application, lenders consider your financial circumstances and credit history. Improving your credit record may help your chances of securing your mortgage deal, but acceptance also depends on the lender’s criteria and whether the mortgage is affordable for you. 

Here are some steps that may help you prepare before applying. 

What Is a Credit Score and Why Does It Matter?

A credit score is a number based on information in your credit report. It gives an indication of how lenders may assess your credit history. Credit reference agencies use different scoring systems, and the score you see may differ from the assessment a lender makes. 

A positive credit history may improve your mortgage options. However, a higher score alone does not guarantee acceptance, a lower interest rate or a larger mortgage. Lenders also consider factors such as your income, outgoings, existing borrowing and deposit. 

Tips to Help Improve Your Credit Score Before a Mortgage Application

Check Your Credit Reports and Report Any Errors 

Check your credit reports with agencies including Experian, Equifax and TransUnion. They may hold different information, so reviewing reports from more than one agency can help you identify problems that might affect your application. Look for incorrect addresses or account details, duplicated debts and wrongly recorded missed payments. 

If you find an error, ask the relevant agency to investigate and correct it. It must respond within 28 days to explain whether it has changed or removed the entry, or taken no action. This does not guarantee a correction or an increase in your score. 

Register to Vote 

If you’re eligible, register to vote at your current address. This helps lenders and credit reference agencies confirm your identity and address and may improve your credit score. 

It can take several weeks for registration to appear on your credit report, and the timing and effect on your score will vary. Check that your details have been recorded correctly. 

Pay Bills on Time 

Paying bills and credit repayments on time is an important way to build and maintain a positive credit history. Late or missed payments on accounts reported to credit reference agencies can affect your score and future credit applications. 

Avoid Applying for Lots of New Credit 

Try to limit unnecessary credit applications before applying for a mortgage. Full applications usually involve a hard search, which other lenders can see. Several hard searches in a short period can affect your score or how lenders assess your application. 

Eligibility checks that use a soft search do not affect your credit score. Check which type of search will be used before proceeding. 

Reduce Your Existing Debt 

Reducing existing debt, where affordable, may help your credit record. For credit cards, paying down balances while your credit limits stay the same lowers your credit utilisation—the proportion of your available credit that you are using. 

Lower credit utilisation may help your score, although the effect depends on your wider credit history. 

How Long Does It Take to Improve Your Credit Score?

Some changes may be reflected relatively quickly, while other improvements can take several months. The timing depends on your circumstances and how quickly information is updated on your credit reports. 

Start reviewing your credit history well before applying for a mortgage. Consider speaking to a mortgage adviser early, rather than waiting for your score to improve. 

Your home may be repossessed if you do not keep up repayments on your mortgage