First-time buyers – why it’s important to know your credit score
I’m not a huge fan of New Year’s resolutions, but I do like to set myself an exciting goal for the year ahead; something to work towards and keep me motivated.
For some of my clients, the Christmas period is the time of year they realise how much they want their own place. And their goal for the year is to get on the property ladder.
Perhaps you’re the same? Are you living at home and getting frustrated with mum’s constant questions about your love life? Perhaps you live with housemates and over Christmas they failed to wash up their dishes for the millionth time? Maybe you rent a home from a landlord that just won’t fix the boiler?
Whatever your reasons for wanting your own place, Downton Mortgages & Financial Services are here to make the process of getting your first mortgage as smooth as possible.
So instead of New Years fitness resolutions, we thought we’d help you get “mortgage fit” with a short series of mini-blogs explaining how to get your finances in great shape before applying to mortgage lenders.
Here are the links to the full series:
Topic 1 – Knowing your credit score
Topic 2 – Getting clear on your monthly outgoings
Topic 3 – Building up your savings
Topic 4 – Working with a mortgage broker
So, let’s get started with our first topic…..
What is your credit score and why is it important to your mortgage application?
Your credit score gives an indication of the health of your credit. The healthier your credit, the less risky you will appear to a mortgage lender. Mortgage lenders are in the business of managing risk to ensure any loan they give will be repaid, so you’re more likely to secure the best rates with more lenders if your credit is in good shape.
How do I find out what my credit score is?
Your credit score gives an indication of the health of your credit. One of the first steps I take when working with first-time buyers is to have them access their detailed credit report which I review and discuss with them. This allows us to identify areas that might need a bit of a health kick!
If you’re not planning to use a mortgage broker, then you can still access some of this information by using a credit score company. The 3 main providers are Experian, Equifax and TransUnion who will give you a numerical score along with a report showing exactly what has contributed to your rating.
What do I do when I know my credit score?
Your credit score is never set in stone and lenders create their own scores. While the history of your credit health is important, mortgage lenders are more interested in your current situation and future affordability. The sooner you take steps to improve bad credit, or make plans to maintain a healthy credit profile, the better.
Your credit report is more helpful than the score itself. Take time to fully understand the detail of it and identify the most important areas that need attention. Sometimes there could be a few simple issues such as not being on the electoral register or still having a joint bank account with someone who has bad credit themselves.
If you find the report bamboozling or have credit challenges that you’re not sure how to address, then a mortgage broker can help you find your way, we look at them every day!
How can Downton Mortgages & Financial Services help first-time buyers?
Here’s what you can expect from us if you decide to use a mortgage broker to find your first mortgage:
- We’ll take care of researching a comprehensive range of mortgage lenders and will come back to you with a list of options which we’ll chat through together.
- Once we’ve decided on your mortgage lender, we’ll take care of the application for you right through to completion and liaise with them on your behalf.
- We’ll also give you advice on buildings insurance and any personal insurance you might need, taking care of the applications for those too.
- We’re on hand to answer any questions, however small, to make sure you’re confident and happy with the decisions you’re making.
If you want to find out a bit more about us, then take a look at our website and get in touch for a no obligation chat.
Other blogs in the “Get Mortgage Fit” series
Topic 2 – Getting clear on your monthly outgoings
Topic 4 – Working with a mortgage broker
Other blogs we’ve written on related topics
Can I get a first time mortgage if I have bad credit?
Important Information
The information contained within was correct at the time of publication but is subject to change (January 2024).
Please note for all mortgage products, terms and conditions apply. This information is a summary only. You will receive full documentation upon application which sets out the terms, conditions and limitations of lending provided.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.