With the beginning of spring upon us, you might be feeling inspired to do a spring clean of your home or take control of your finances with the start of a new tax year beginning. As the flowers start to bloom and we welcome warmer weather (fingers crossed), spring is truly the perfect season to begin your home owning journey.
However, it is essential to have your credit score in check before you start your Shared Ownership journey.
Lenders use your credit report to get information on how reliable you have been at paying back debts in the past. When you apply for a mortgage you will have to supply payslips, P60s and bank statements to show how much you earn and what your monthly budget might look like.
Looking to tidy your credit score this spring? Follow our checklist to improve your credit score so you can say hello to your new home.
Having large amounts of debt could make your credit report look a little messy. Any debt you carry will appear on your credit report. But if you’re borrowing too much, potential lenders might worry you’re relying on the credit to get by. That could mean they’ll decide against lending to you, as you might struggle to keep up with more debt on top of your existing repayments.
Trimming down your credit card debt or paying off a loan will show lenders that you’re not dependent on credit. A general rule of thumb is to stick to spending around 30% or less of your total available limit.
If you’ve ever shared a financial product with someone else like a joint loan or a shared mortgage, their name will flag up on your credit report. This means lenders looking at your report will be able to see their credit history, too.
Luckily, you can remove any unflattering financial connections by asking your credit reference agency to remove them.
Have you checked your credit report lately? Make sure you update any old information and query any mistakes with your credit reference agency. Even if they don’t remove the mistake, you can add a ‘notice of correction’ explaining your side of the story onto your report.
Whether you use them or not, these accounts will still be included in your overall credit limit. Even if you’re not currently using it, lenders may worry that you’ll decide to spend a large amount of money all at once on your credit card – and then struggle to pay it back.
Shutting these accounts down will reduce your overall limit and could boost your eligibility for a new Shared Ownership home.
We provide an array of affordable, top quality, modern apartments and houses across England, all of which are available to purchase with Shared Ownership. Start your search by viewing our current properties available.