Top 10 things you need to know about your credit history.

Want Fit Finances? "Check your credit report MONTHLY", say’s Business Coach and Mortgage Expert, Gary Das.

Here are the top 10 things you need to know about your credit report and property finance in 2019.

As the founder of an award-winning mortgage brokerage Active Mortgage, a business coach and best-selling author of the Self Employed Mortgage Guide, I’m often asked: ‘what’s the one mistake that First Time Buyers and newbie property investors make?’

My company Active Mortgage won small broker of the year at the 2019 Mortgage Strategy Awards and our mission is to make mortgages and property finance as easy as possible.

And if there’s one mistake that First Time Buyers and new property investors make and which makes mortgages property financing tricky, it’s not checking your credit report regularly.

Not checking your credit report regularly results in losing property finance deals, failing to get a mortgage Agreement in Principle, (AIP) higher interest rates applied to your lending, more stress, wasted time and some serious amounts of frustration.

But you can avoid this by doing one simple thing.

Check your credit report MONTHLY.

I’m sure many of you are thinking: ‘hang on, I do this already’. But here’s the thing: not all credit reports are equal and there are also four separate credit reference agencies. So which credit report should you use?

Mortgage lenders tend to use Experian or Equifax and many people use free services like Noddle or Clear Score.

Now, all the above are great, but as I said they don’t always seem to show everything. In the past I have seen clients where borrowing such as their Lamborghini finance was not on their credit report; we’ve also found missing credit cards, loans and even CCJs which do not show up until we do the AIP with the lender.

So the one we recommend (and are in partnership with) is “Check My File” (It’s against the rules for me to share a link)

Any decent mortgage broker will want to see your credit report pretty much straight away so they can be accurate with their advice and information from the get-go. But it’s important that this credit report is as full and extensive as it can be. And sometimes they just aren’t.

The benefit of Check my File is that it combines all UK credit reference agencies into one place and since early 2018 when we started to recommend Check My File to our clients we have seen far fewer problems in securing property investment as well as more accurate results in assessing how much clients can borrow.

Here are the top ten things you need to know about your credit report in 2019 and how to effectively check it.

1. Protect and treat your credit history/report/score like your child: it is the most sacred thing ever when it comes to financing/mortgages and property.
2. Your credit report updates once per month usually around the 15th (example you clear a loan today it may not be reflected on the report until 15th of the next month depending on the date it is cleared)
3. Check your report monthly – even if you are experienced it’s money well spent.
4. If you spot any errors, mistakes or issues: contact the supplier i.e. the bank and get written confirmation that the mistake has been rectified.
5. Make sure you are on the electoral roll at your current address: this improves your credit score.
6. A soft search is a credit search made on your credit file that won’t affect your credit score. Although it’s recorded on your credit file like every other search, lenders can’t see it so it won’t affect their lending decision.
7. A hard credit check happens when a company makes a complete search of your credit report. Each hard check is recorded on your report, so any company searching it will be able to see that you’ve applied for credit. Too many hard credit checks over a short period of time can affect your credit score for six months and thus reduce your ability to get approved for credit in the future. Some lenders use hard checks and some will use soft credit checks. The benefit of a good mortgage advisor is that they will know the kind (hard or soft) credit checks each lender uses.
8. How to increase your chances of having your property borrowing/ mortgage accepted: pay off existing borrowing, make regular payments on any borrowing you have and avoid too many applications for credit in a short space of time.
9. Create a healthier credit score: If you have a poor credit history, you might want to consider a credit-builder credit card. By using these cards, paying off the bills each month, you can prove you’re creditworthy, increase your credit score, although bear in mind, the interest rates charged on these cards are much higher than on standard credit cards.
10. What does a good credit score look like?

A good credit score with:

• Callcredit is scoring 4 out of 5
• Equifax is scoring over 420 out of 700
• Experian is scoring over 880 out of 999.

Remember: your credit score doesn’t guarantee that you’ll be approved for finance/mortgages or that you will be offered the lowest interest rates.

This is why I am so passionate about #FinanceFirst. The most important thing when it comes to getting a mortgage or securing property investment and finance is to get your own finances prepared. This ensures you are in A1 position ahead of the competition and ready to make your first or next exciting property move.

Always remember: your home may be repossessed if you do not keep up payments on your mortgage.