If you are looking to get on the housing ladder, having a good credit score rating can be a fundamental factor in securing a financial agreement such as a mortgage. So what credit score is needed to buy a house? There is no universal credit rating score needed to buy a house, as conditions will vary with different lenders, but according to Barclaycard, anything over 881 can be considered “good,” and anything over 961 can be classed as “excellent”.
So, how can your credit score be improved? In this article we look at six sure-fire ways to get your credit rating up to scratch:
– Use a credit card little and often
You might associate credit cards with a financial product that can damage your credit rating, but you’d be wrong.
Does Having A Credit Card Improve Your Credit Score?
The short answer is yes, as long as you have been repaying it consistently. Using a credit card doesn’t mean you need to start spending a lot. Just a couple of purchases a month will suffice, but you should make sure that the balance has been repaid at the end of the month. This demonstrates that you can manage credit responsibly.
– Keep credit utilisation low
In general, you should aim to keep your credit utilisation low. That means closing any store cards, mobile contracts, credit cards or direct debits which are unused.
– Make sure you’re on the Electoral Roll
Getting on the electoral roll can help your credit rating, because it gives prospective lenders the opportunity to check your details, including your name and address.
– Don’t make multiple credit applications in a short space of time
You should be wary of making lots of credit applications within a short period, as this can harm your chances of getting accepted. Try to space out your credit applications, rather than using an approach which involves multiple applications in a short period. Don’t apply for products you don’t need.
– Get your name on some utility bills or a phone bill, etc.
Ensuring that your name is on bills such as electricity, gas and water – and that you have paid those bills – can be another credit rating improvement strategy.
– Make sure you pay bills on time
Following on from the point above, it is vital that you pay all your bills on time. This is recognised as one of the most effective ways to drive up your credit rating.
So there you have it – six ways in which you can build your credit rating in the UK. If you aren’t confident of having the sufficient credit score to buy a house, don’t despair – use the tips above to start bumping up your score.
Received a mortgage offer? Bowsers can give you advice – call us today on 01945 583 194.