When you apply for a bridging loan or a mortgage, the lender naturally wants to know that you will make the monthly payments. Lenders assess this through both your salary level and your credit rating, with a high credit rating indicating to the lender that you are a low risk.
Your credit rating is worked out from your financial history and other factors, and there are several steps you can take to help you achieve a high one. Below are some examples of factors that can affect the rating:
• Many lenders will not lend you money if you are not on the electoral roll. If you are not already registered, you can fill in a simple questionnaire here.
• Each time you apply for credit, whether it is a loan or to obtain a credit card, a record is made on your credit file. Too many applications in a short period of time will lower your credit rating. Unused credit accounts can go against you too, so if you have credit cards you do not use, consider cancelling them.
• If you have missed too many payments on a loan or a credit card, or made late payments, this will adversely affect your credit rating. Make sure that you pay on time.
• Your credit rating is affected by stability, so the longer you have lived at an address, the better. It also helps to have had a bank account for a number of years.
Even if your credit rating is low now, taking steps over time to improve your rating will assist you greatly in applying to take out a loan in the future.