Plan ahead to make the most of great mortgage deals
Equifax offers guidance for consumers preparing to apply for a new mortgage
Competition in the mortgage market continues to be strong, as lenders cut rates with some great deals now available. Equifax, the credit information provider, is reminding new and existing homeowners that their credit information can play a crucial role in their ability to make the most of the best offers. Lenders will typically look at an applicant’s credit history when determining whether they meet eligibility criteria and may also use credit information during affordability assessments. Therefore, it is suggested that individuals check their credit report before making any applications to ensure that it is in the best possible shape for them.
“Many borrowers will be looking to take advantage of the record low interest rate mortgage deals that are currently available” says Laura Barrett, Equifax Consumer Affairs. “It is however possible that some individuals will still be recovering from the difficult economic conditions of the last few years. If a person has missed or made a late payment on a credit or service agreement prospective lenders could see this and take it into account during the application process. This doesn’t necessarily mean that they won’t get the deal they want – especially if there’s clear evidence of them resolving any financial difficulties. However, there may be things they can do to help demonstrate to lenders that they are responsible borrowers.
“We have put together some useful points on making sure an individual’s credit history reflects their financial circumstances in the best possible way. It’s also important to remember that lenders will also take into account the information provided on the application form and will look at an applicant’s income and outgoings to ensure they can afford the mortgage they are applying for, now and in the future.”
The Equifax credit information check list
- Check your credit report
Apply for a copy of your credit report as much as 6 months before you start making new applications for credit. This will allow you to review your report to ensure it is accurate and up-to-date.
- Do you have a credit history?
Lenders typically look at your credit history when making a decision on your application. If you already have a history of meeting your financial obligations, including repaying credit cards, loans or credit accounts and service contracts, lenders can use this to decide whether to approve your application. If you don’t have much credit history you could consider taking out small amounts of credit in order to demonstrate your ability to responsibly manage credit and repay debts. If you decide to do this, ensure the full balance is paid off each month to avoid being charged interest.
- Are you registered?
The electoral roll is used by many companies for identity verification purposes in order to combat identity fraud. It is important, therefore, that you are registered on the electoral roll at your current address.
- Correcting errors
If there’s a mistake on your credit report and it is in relation to a specific account, contact the lender or service company it relates to and ask for the error to be corrected. If you’re unsure which company to contact, you can contact the credit reference agency concerned and they can raise this with the lender or service company on your behalf. In most cases the correction will appear on your credit report within 28 days.
- The right to explain
You can also add a ‘notice of correction’ to explain any items on your report, such as missed payments, which may have occurred due to life changes, such as losing your job. The ‘notice of correction’ will only be recorded with the Credit Reference Agency (CRA) you provide it to and will stay on your credit file indefinitely. The lender will see it when considering an application.
- Individual Voluntary Arrangement (IVA) and County Court Judgments (CCJ)
If you are declared bankrupt or take out an IVA, it could impact your ability to gain access to credit during that period.
If you’ve had a County Court Judgment 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.
Both these events will stay on your credit report for six years.
- Managing existing credit agreements?
Try to pay more than just the monthly minimum on credit agreements and where possible keep credit balances low. Settle debts, such as personal loans or hire purchase agreements in full. This demonstrates your ability to repay debts. Missed payments may make lenders think you’re already struggling with debt.
- Have you got cards you’re not using?
Lenders will often look at the total amount of unutilised credit available to an individual and consider this when making a lending decision.
- Don’t apply for credit too regularly?
Avoid multiple applications in a short space of time. Each application logs a search on your credit file. Too many could appear as if you already have too many commitments.
The Equifax Credit Report and Score 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 £7.95 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.
For further press information, please contact: Clare Watson, Cecile Stearn, Parm Heer or Wendy Harrison at HSL on 020 8977 9132 / Fax: 020 8977 5200 or email: firstname.lastname@example.org
Equifax is a global leader in consumer, commercial and workforce information solutions that provide businesses of all sizes and consumers with insight and information they can trust. Equifax organizes and assimilates data on more than 600 million consumers and 81 million businesses worldwide. The company’s significant investments in differentiated data, its expertise in advanced analytics to explore and develop new multi-source data solutions, and its leading-edge proprietary technology enable it to create and deliver unparalleled customized insights that enrich both the performance of businesses and the lives of consumers.
Headquartered in Atlanta, Equifax operates or has investments in 18 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. In 2013, Equifax was named a Bloomberg BusinessWeek Top 50 company, was #3 in Fortune's Most Admired list in its category, and was named to InfoWeek 500 as well as the FinTech 100. For more information, please visit www.equifax.com.
Equifax Limited is authorised and regulated by the Financial Conduct Authority.