Your Essential Guide
Credit scores are very much in the news right now. Experian, one of the big three credit agencies, will soon score people out of 1,250 instead of 999. This will mean that many people’s scores will change, and that can cause panic if you are trying to buy a home. So there has never been a better time to really look at what credit scores mean when you are trying to get a mortgage. Here is everything your mortgage broker wishes you knew.
It’s not all about the score
First of all, your score isn’t the only thing that a lender is looking at. While it gives a general overview of your credit history, lenders aren’t just going to take it at face value. They are looking for reliability and stability, and will examine things like your payments and outgoings. They are going to carry out other checks as well. For example, if you have a perfect credit score but you don’t have a high enough wage, you won’t be approved. So it’s not the be-all and end-all.
A bad credit score doesn’t mean you can’t buy a home
A lot of people assume that a low credit score means that they can never buy a home. This just isn’t true! When you have a more complex credit history and a score that reflects that, you have two options. Number one: go away and take the time to build a stronger credit history. Number two: explore mortgages for those with bad credit. There are pros and cons to both, and your mortgage broker is there to help you make the right choice.
You need to check your score beforehand
Don’t leave it until you apply for a mortgage to check your credit score. So many buyers come to a broker with no idea of what their credit score is, and this can lead to some nasty surprises. Checking your credit score ahead of time can also give you a chance to fix any errors that are on file. Something might be dragging your score down through no fault of your own, so be sure to check it now!
A broker isn’t there to judge your credit score
Lots of people come into their first appointment with a mortgage broker feeling like they are about to be judged. That simply isn’t true. A broker isn’t there to tell you off. They are there to get to know you and find you the best possible deal based on your circumstances. They are also sources of great advice on how to improve your credit score and boost your chances of getting approved. They’re there to help you.
As you can see, there are lots of things that you might not have known about credit scores. By keeping all of the above in mind, you can really help your broker to work in your best interests.
