How to clean up your credit file when applying for a mortgage

If you are thinking about applying for a mortgage, it makes sense to be sure that your credit profile is as good as it can be. By following the tips we have put together here, you can be sure that there will be no surprises for you or your lender.

• Check your credit file. This is something you should do regularly anyway, but it is even more important before you apply for a mortgage. For a very small fee, you can obtain copies of your file from the credit reference agencies, Equifax, Experian and Callcredit. This will let you check that the details they hold are up to date and correct. If any details are wrong, such as showing that you have missed a payment when you haven’t, ask for the file to be corrected.
• Set up direct debits. If you have regular outgoings, such as mortgage payments or utility bills, set up direct debits to pay them. Not only will this make it easier for you to manage your money and reduce the chances of you missing any payments, it lets lenders see that you are organised and committed when it comes to paying bills on time.
• Settle outstanding debts. If you have missed any payments for anything, get the account up to date as soon as possible. If your credit file shows that you haven’t stuck to an agreement, your credit score could well be reduced as the lender may see you as a higher risk.
• Get on the electoral register. Make sure you are properly registered at your current address, as all lenders have to verify your identity in order to comply with money laundering regulations and prevent identity theft. If you aren’t on the electoral role when you apply for a mortgage, the lender may reduce your credit score or even reject your application altogether.
• Don’t make lots of applications. In the months or weeks before you apply for your mortgage, make sure that you don’t apply for lots of other things, like loans or credit cards, which require credit checks. Every time you are credit scored it is recorded on your file, and lenders may see a lot of credit checks in a short time as a sign of someone who might be struggling to manage their money. If you see credit checks on your file that you don’t remember, ask for them to be removed.
• Check any related accounts. Your own credit file might be clean, but it is important that your partner or anyone else who is applying with you checks their file in the same way as any adverse information will also affect your application.