How to improve your credit score

As part of our How to Buy series, this blog from the Mortgage Bureau looks at your credit score and what you can do to improve it when buying a new home.

When applying for a mortgage, lenders use your credit score to analyse the risk and determine how likely you are to repay the amount you borrow, including interest.

It is calculated using answers from your mortgage application (points are allocated to certain questions throughout) and your payment history for existing loans, credit cards or hire purchases. If you pay off any other financial commitments in full and on time you’re more likely to have a higher credit score, than if you miss or are late with your payments as you are demonstrating a responsible attitude towards debt to a lender.

You can check your credit score for free with Experian. Just remember, all lenders have different criteria and set their credit score pass rate accordingly, so a high credit score from Experian does not automatically mean a high score with a lender. Particularly given your deposit will also affect your credit score with a lender, as generally the greater the deposit the lower the score you need to pass.

Here’s five top tips to improve your credit score and help get the most suitable mortgage for you:

1.    Make sure all your credit information is correct, as a wrong address can change the way your payment history is reflected to a lender.

2.    If there is anything that is incorrect, you can request a Notice of Correction as long as you can provide the necessary evidence.

3.    Look at the credit score of anyone you share a linked account with and make sure you aren’t financially associated to anyone with poor credit.

4.    Make sure you’re registered on the electoral roll at your current address, you can register to vote online here.

5.    Avoid too many searches on your credit file, especially with comparison websites as they search individually with service providers which can lead to multiple ‘footprints’ and impact your score for up to three months. Instead, let your Financial Adviser do the searching for you!

If you want to know more, speak to a member of our Sales Team in the Sales and Marketing Suite at your local development and they’ll be happy to help by putting you in touch with one of our Independent Financial Advisors. 

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10 reasons to buy new

Compared to an older, second-hand home, buying new can offer a number of advantages that you might not have thought about before…

1.    It’s brand new! So you’ll be the first person to call it home.

2.    A new build is essentially a blank canvas, ready for you to make it your own.

3.    Everything is new, from the kitchen to the bathroom, so you won’t have the added cost of renovating when you move in.

4.    Depending on when you buy, you may be able to select some of the fixtures and fittings, and start to put your personal stamp on the place before you move in.

5.    New homes are built to the latest environmental standards, making them more energy efficient and ultimately cheaper to run; saving you money in the long run.

6.    They’re also safer and more secure, with smoke detectors and burglar alarms generally fitted as standard.

7.    Using Help to Buy, you can secure a new home with a deposit of just 5% and a 75% mortgage, the government will provide an equity loan of up to 20% to cover the remaining cost (which is then interest free for the first five years).

8.    If you have a property to sell, you may be able to use Part Exchange or Assisted Move to make the sales process easier (and less stressful).

9.    Second hand homes can often come with costly repairs, but with a new home there won’t be any surprises when you move in.

10.  Your new-build home will typically be covered by the NHBC Buildmark warranty which covers any major defects to the structure of your home for up to ten years after completion. 

If you buy with St. Modwen Homes you’ll also benefit from a two year guarantee which goes above and beyond Buildmark, guaranteeing items supplied as part of your new home, including your guttering and alarm system for the first year. The heating, plumbing and electrical systems in your new home are also covered for up to two years after completion by the St. Modwen Homes' warranty.

When it comes to design, St. Modwen Homes’ award-winning philosophy of ‘light and height’ means each property is built with higher than average ceilings and large windows throughout, to create bright, open spaces, offering both style and practicality.

If you want to know more, visit www.stmodwenhomes.co.uk or follow the housebuilder on Twitter, Instagram and Pinterest. 

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