Homebuyers wanting the best fixed rate mortgage deals should check their credit report before applying
15 February 2013
As it’s being reported that a price war has broken out between providers for
fixed rate mortgages, credit information expert, Equifax, is urging
homebuyers to review their credit history before they try to make the most
of the lowest ever 2 and 5 year fixed rate deals.
“Probably encouraged by the Bank of England Funding for Lending scheme,
there are now some fantastic fixed rate deals being offered in the mortgage
market”, explained Neil Munroe, External Affairs Director, Equifax. “But
homebuyers who want to capitalise on these offers need to make sure their
credit history will help them secure the best possible rate for their
Lenders make checks with credit reference agencies to see whether an
applicant has kept up to date on repaying their credit. Having several
credit cards with high limits and missing repayments can be cause for
concern for lenders and could give the impression the person is financially
stretched. And that could result in an individual being unable to obtain
new credit or paying higher than the rates currently getting all the
“It’s really important that anyone planning to apply for new credit –
including a new mortgage – checks their credit information before they start
making applications” continued Neil Munroe. “Then at least they can spot
any information that might need updating – such as being registered on the
electoral roll – to put them in the best position to get a good deal. And
if they are declined or offered a less favourable rate they will be able to
ask the lender the reasons why, fully armed with the knowledge about their
own credit history.”
The Equifax Credit Report is accessible for 30 days free simply by logging
onto www.equifax.co.uk. If customers do not cancel before the end of the 30
Day Free Trial, the service will continue at 8.99 pounds per month, giving
them unlimited online access to their credit information and weekly alerts
on any changes to their credit file. It also includes an online dispute
facility to help them correct any errors on their credit file simply and
The Equifax app is available free from the Apple iTunes Store on iPhone and
iPad and from Google Play for Androids.
TOP TIPS TO IMPROVE YOUR CREDIT SCORE
1. Are you Registered?
The electoral roll is used by many companies for identity verification
purposes in order to combat identity fraud. It is vital, therefore, that you
are registered on the electoral roll at your current address. And if you
believe the address is not properly presented, you can ask the credit
reference agency to take this up with the lenders and the local authorities.
2. Are you credit active?
Not having many credit cards or loans can affect your credit score. Lenders
are looking for signs that you are capable of repaying money you have
borrowed. So it’s worth considering opening an account to establish a credit
history – even if you pay it off in full at the end of every month.
3. Change of Circumstances
If your circumstances have changed and you have had difficulties keeping up
with credit payments, then it’s important to say so, for example if you were
made redundant or recently divorced and have fallen behind on credit
repayments. You can place a Notice of Correction on your credit file
explaining the background to any missed payments, especially if you have now
got back up to date. A lender will review this when assessing any credit
applications you make.
If you believe a lender/company has provided incorrect information on your
credit file, you can raise a Notice of Dispute with the Credit Reference
Agency and they will take this up with the lender. This will usually be
resolved within 28 days.
4. County Court Judgments (CCJ)
If you’ve had a CCJ and it is now settled make sure the settlement is
recorded on your credit file. If not contact the court to get confirmation
details and inform the credit reference agencies.
5. Stop Applying
If you have been refused credit, obtain a copy of your credit report. But
DO NOT carry on applying elsewhere. Each credit application search by a
lender will leave a “footprint” on your credit file. Too many searches in a
short space of time can be perceived by lenders as you maybe over-stretching
yourself financially and could therefore affect your ability to get credit.
6. Avoid a high balance
Avoid carrying a balance that is more than 30 per cent of your credit limit.
Lenders may view this as a sign of you having too much credit already and
that you therefore may not be able to keep up with any new repayments.
7. Be Direct
It’s easy to forget a payment so setting up direct debits and standing
orders with your bank will ensure payments go out on time.
8. Close it Down
Make sure any accounts you don’t need or use are closed. Lenders are paying
more attention to the total amount of credit available to an individual and
whilst you may not be using them, these accounts could affect your ability
to get credit.
9. Early Bird Catches the Worm
Try to pay off loans and credit agreements ahead of schedule. Lenders will
look favorably on this.