Getting a mortgage, credit card, loan and even a phone contract can be a nightmare if you don\u2019t have a good credit score. Discover how to improve yours with FOMO\u2019s top tips.<\/p>\n\n\n\n
Your credit score is a number between 300\u2013850 that reflects creditworthiness.<\/p>\n\n\n\n
A higher score will improve your chances of borrowing money, for everything from mortgages, loans, credit cards and mobile phone contracts.<\/p>\n\n\n\n
Your credit score is calculated on a number of factors, from your total level of debt, your history of repaying debt, total number of open accounts and more.<\/p>\n\n\n\n
The lender uses these factors to determine the likelihood you will repay loans in a timely manner.<\/p>\n\n\n\n
It’s important to understand that you don\u2019t have a single credit score. Each lender has their own way of calculating their credit score.<\/p>\n\n\n\n
Having a good credit score will improve your chances of receiving a mortgage offer.<\/p>\n\n\n\n
Here are FOMO Mortgages top tips on improving your credit score:<\/p>\n\n\n\n
Register on the electoral roll at your current address<\/strong> \u2013<\/p>\n\n\n\n This is simply to prove where you currently live.<\/p>\n\n\n\n Create a credit history<\/strong><\/p>\n\n\n\n Lenders assess your suitability for borrowing based on current and historical factors. If you have little or no credit history, it makes it harder for companies to comprehend your situation. If you are young or new to the UK, this may be a problem for you. So it\u2019s worth considering FOMO\u2019s list and how you can improve your credit score.<\/p>\n\n\n\n Make payments on time<\/strong><\/p>\n\n\n\n Paying your bills and repaying any loans or credit in full each month is a good way to demonstrate you are capable of managing further credit. Be aware that while aged, well-managed and active accounts can be helpful, unused credit cards can impact your credit score – read more about that here<\/a>.<\/p>\n\n\n\n Keep Credit Utilisation as low as possible<\/strong><\/p>\n\n\n\n Credit utilisation = the percentage of your credit limit which you use.<\/p>\n\n\n\n Say you have a limit of \u00a31000, if you have used \u00a3500 of it, your credit utilisation would be 50%.<\/p>\n\n\n\n Lenders like to see a low credit utilisation percentage. A good rule of thumb is to try to keep yours below 30%, according to Experian.<\/p>\n\n\n\n Fact check your report<\/strong><\/p>\n\n\n\n Small errors can impact your credit score. Check your credit report thoroughly to ensure everything is correct.<\/p>\n\n\n\n If you see a mistake, contact your provider and ask them to change it. FOMO\u2019s expert mortgage advisers can also help if you\u2019re stuck.<\/p>\n\n\n\n There may also be negative information that is correct but occurred during extenuating circumstances. This might be due to redundancy or ill health. In this scenario, you can ask for a \u2018Notice of Correction\u2019 to be added to your credit report to explain the discrepancy.<\/p>\n\n\n\n Opt for stability<\/strong><\/p>\n\n\n\n Life doesn\u2019t always go according to plan. But lenders like to see stability within your personal circumstances. Those who move home frequently may lead lenders to believe they are having trouble paying rent.<\/p>\n\n\n\n Old accounts<\/strong><\/p>\n\n\n\n Older credit accounts can demonstrate to lenders that you can successfully manage multiple credit streams. The longer you have achieved this feat for, the better – in the eyes of lenders.<\/p>\n\n\n\n Consider getting a credit builder card<\/strong><\/p>\n\n\n\n If you need to improve your credit rating you could consider a \u2018credit builder\u2019 card. These are cards which usually have low spending limits and high interest rates.<\/p>\n\n\n\n It\u2019s worth noting that when you first get the card it may cause your score to drop. But if you use them for a small amount of spending each month, which you can repay in time, it can help build your credit score.<\/p>\n\n\n\n One way to achieve this is to only use this card for purchases you would be making anyway i.e. groceries or essentials.<\/p>\n\n\n\nLooking for advice<\/h2>\n\n\n\n