WILL FIRST TIME BUYERS MISS OUT ON THE STAMP DUTY HOLIDAY BECAUSE OF POOR CREDIT RATINGS?
First-time buyers should get their credit ratings in shape before the Stamp Duty Holiday ends in March says Equifax
London, 18th January 2012 - With the price of one and two-bedroom properties at its lowest since 2007* and the Stamp Duty holiday for homes worth less than £250,000 coming to an end in March, first-time buyers will be keen to get on the property ladder. Lenders are offering attractive deals to new buyers with deposits of less than 10%, but only those with the best credit ratings will have the best chance to get the best mortgage offer, warns Equifax.
The Stamp Duty holiday for first-time buyers currently applies to all properties worth less than £250,000, but this will revert back to the lower £125,000 in March 2012. With rent rates soaring, this could be the ideal time for first-timers to go house-hunting. However, despite a number of new deals on the market, Neil Munroe, External Affairs Director, Equifax believes new house buyers need to work hard to secure a favourable mortgage. And having a good credit rating is vital.
“Lenders are trying to encourage first-time buyers with smaller deposits by offering some good deals which, of course, is great for stimulating the market”, said Neil Munroe. “But the reality is that mortgage providers are still cautious about who they extend credit to, preferring to focus on those buyers who represent the lowest risk.”
“This means any history of previous late payments on other finance or credit may affect a first time buyer’s ability to get a good deal. But if they know exactly how a lender will view them, this will give them the ability to provide the fullest information in their mortgage application.”
Equifax is therefore urging first-time buyers to check their credit file before they start making applications. This allows them to see exactly what the lender sees, as well as giving them a detailed overview of all their accounts and credit agreements.
“With access to their credit file, first-time buyers can ensure all their current credit agreements are on file and correct any information that might not be up to date” continued Neil Munroe.
“And if they are unsuccessful in their application, they should stop shopping around and ask the lender why they were declined. Anyone making an application for credit has a right to know why they were declined and it might simply be the case that some of the information on their credit file needs updating. Or it might be that they don’t fit the profile of customers for a particular lender - and that means they can apply elsewhere.”
With the Stamp Duty holiday about to end, Equifax has put together a simple guide for first-time buyers to improve their credit rating and improve their chances of getting on the property ladder.
EQUIFAX’S GUIDE TO BOOSTING YOUR CREDIT RATING
- Check your credit file - see exactly what the lender sees before you apply for a mortgage and stay in control of your finances.
- Close old accounts - close any dormant accounts or unused credit cards, otherwise lenders may see you as at risk of building up unmanageable debts.
- Don’t be late - try not to make late payments on credit cards, loans or other credit agreements. This could damage your credit rating and ability to get a good mortgage deal.
- Register to vote - Make sure you are on the Electoral Roll to ensure identity checks run smoothly. If it’s difficult to verify your identity, lenders could turn you down.
- Make corrections - correct any inaccuracies on your credit file. Make sure your address is correct and add notes to explain any missed payments.
The Equifax Credit Report, with the facility to access credit information for the first 30 days free, is accessible simply by logging onto www.equifax.co.uk. Designed to help individuals understand their credit file and see what lenders see to assess new credit applications, the Equifax Credit Report also includes expert tips and advice to help consumers take the right steps to manage their finances and navigate through life's challenges.
If the customer does not cancel before the end of the 30 Day Free Trial, the service will continue at £6.99 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 quickly.
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Equifax is a global leader in consumer and commercial information solutions, providing businesses of all sizes and consumers with information they can trust. We organize and assimilate data on more than 500 million consumers and 81 million businesses worldwide, and use advanced analytics and proprietary technology to create and deliver customized insights that enrich both the performance of businesses and the lives of consumers.
Headquartered in Atlanta, Equifax operates or has investments in 17 countries and is a member of Standard & Poor’s (S&P) 500® Index. Its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. For more information, please visit www.equifax.com.