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Your Credit File

Understanding your credit file and how your credit decisions affect your chances of getting your mortgage approved is crucial in today’s market.

 

Your Credit Score is King!

When it comes to mortgages your Credit Score is king! Lenders aren’t just checking your credit file for Defaults and CCJ’s, they are profiling your entire credit history, indebtedness and lifestyle choices.

At Blueberry, we offer all our clients a free credit health check, we’ll explain in simple terms how lenders score your mortgage application and how by making some simple changes to your credit profile, you can improve your chances of getting your mortgage approved first time. 

Common questions below

What is a credit report?
Your credit report is a key element of your financial CV. It details the credit you have taken out such as credit cards, loans and mortgages, along with your repayment history, and any CCJ’s, defaults or bankruptcies against you and much more.

Can I see my Credit Report for free?
Yes, you can get your FREE Experian Credit Report and Score by clicking on the following link http://www.creditexpert.co.uk

How is my Credit Report used for mortgage purposes?
Lenders will check your Credit Report when you apply to them. Lenders will be able to verify the payment history for the last six years, if you have missed payments, have CCJ’s or Defaults or even missed mortgage payments, the lender will take all this information into consideration when making a lending decision.

Lenders will also look closely at your lifestyle choices. You may be confident that you can afford your mortgage payments, but your Credit File could indicate that you may not be able to afford your mortgage payments in the future.


If a lender searches my Credit File, will this affect my Credit Score?
In most cases when a lender completes a search, this will leave a footprint on your credit file. The more searches completed, the more footprints on your credit file. If you have too many footprints especially in a short period of time this can reduce your credit score and this in turn could reduce your chances of getting your mortgage approved.

We recommend that all clients provide a copy of their current Experian Credit File to their Mortgage Consultant; this allows the Mortgage Consultant to match your mortgage requirements to a lender’s credit criteria.

If you instruct a Mortgage Consultant to complete a Decision in Principle which will result in the lender leaving a footprint on your Credit File, the Mortgage Consultant will advise you of this and of any likely impact on your Credit Score.


Does a perfect Credit Score mean I will definitely get my mortgage approved?
The simple answer is no, lenders are now profiling your credit history. This means they look closely at your income and expenditure, for example if have a perfect credit score but your credit card balances are at their limits, even you are making all payments on time, the lender could decide that your finances are stretched and decline your application.

As strange as this may seem, even if you settle your credit card balances each month, if you have high levels of unsecured credit available, a lender could make the assumption that your mortgage is not affordable should you decide to increase your credit card balances.


What information is recorded on my Credit Report?
Information on the following items is shown in your credit report:
  • Profile Details
  • Credit Accounts
  • Electoral Roll
  • Aliases
  • Financial Associations
  • Public Records
  • Previous searches of your report
  • CIFAS - The UK's Fraud Prevention Service
  • GAIN - Gone Away Information Network

Where does this information come from?
Information on your credit report is taken from two main sources - public records and from lenders. Public records hold information such as court judgments and whether you are recorded to vote. Many lenders share details of their customers' credit accounts, such as the amount they have lent and whether repayments are made on time.

This information is stored securely by credit reference agencies - Experian is the UK's largest.


Who can see my information?
Only organisations who are members of our information-sharing scheme can see credit information. They can normally only look at your credit information if you have given them permission. They usually ask for this on the application form you fill in.

Lenders must follow strict rules that clearly list what they can use the information for.


What is a Credit Score?
Before deciding whether or not to offer you credit, many organisations take your credit report, plus the details you give the lender on your application form to generate a credit score. This is a single figure that indicates how likely you are to repay what you owe.

Usually, the higher your score, the easier you will find it to borrow and get a good deal.


Calculating your score
You don't have a single credit score, because every lender uses a different formula, based on how previous customers have repaid their credit. Some even use different methods for different types of credit, so applications for a car loan and a mortgage would deliver different scores. Your credit score also changes over time, as your circumstances change.

If you are turned down, you can ask the lender why. They will be able to tell you the main reason that you were refused - whether the decision was based on a credit scoring decision or because of information on your credit report.

Although lenders are wary of revealing exactly how their scoring systems work - this would make them easy prey for fraudsters - they should tell you the main reason why your application was refused.


Your Experian Credit Score
Blueberry recommends Experian

Your Experian Credit Score will give you an idea of the impact your credit history has on your credit score. It will not be exactly the same as a score calculated by a lender because it is based only on your Experian credit report and doesn't take into account the information on your credit application, but it can be a useful prediction of the way lenders are likely to view your creditworthiness.

Get a free copy of your Experian Credit File at http://www.creditexpert.co.uk

If you are thinking about applying for more credit the Experian credit score can be particularly valuable because you can get an idea of how you may be assessed.

As a member of CreditExpert, you have unlimited online access to your score. Your score may change as your circumstances change, so it is useful to view your score on a regular basis.

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