In these days of financial uncertainty and banks on the brink of a meltdown it is getting increasingly hard for the average homeowner (or prospective home owner) to get a mortgage or any form of financial lending. There have been a lot of factors that have made lending a rarer act by the banks. They are more interested in taking less risks and reducing the out-going money.
It looks like it may be impossible to get any form of lending short of using loan sharks but all is not lost! Many of us will need a mortgage in order to get a house of our own and this is probably the main reason that less of us are able to purchase property, because the banks are unwilling to lend and we need mortgages to get our feet on the property ladder.
There are things that you can do to help get a mortgage, typically the lenders will only consider people with spotless credit histories, so if you have a history of bad credit tied to your name you may find it a bit tough to get a mortgage, and you can help your case by trying to improve your credit rating. What follows are five tips that financial experts believe will help you improve your credit rating and get yourself in the lender’s good books:
Check your credit score
First and foremost you need to find out what your credit report is like so you know where you stand. You may very well have an impeccable credit rating and so should have no worries about lenders considering you for some form of borrowing. Unfortunately this may not be the case and you may have delinquent credit card bills in your past which may have caused some damage, but nothing is beyond repairing, the sooner you know how your rating stands the sooner you can make a change.
There are three credit bureaus you need to check: Equifax, Experian and Trans Union, the report comes in the form of a three digit number, this number is what the lenders will see whether it’s a loan company, mortgage supplier, landlord or insurers. If you’ve never knowingly been in bad credit or had any sort of borrowing there’s a chance someone else’s information has become mixed up with yours so it’s best to check with these companies just on the off-chance that they are reporting inaccurate information.
Establish Checking and savings accounts
Many lenders consider having bank accounts as a sign of stability and so by having a good arrangement with your finances will reflect well on your ability to get a mortgage. Having separate savings accounts which you contribute towards will look good to prospective lenders, even for younger people who are unable to obtain credit cards until they’re 18, it is still possible to open a bank account and start building a positive financial profile.
The second part of this article will cover the remaining three tips for improving your credit rating so that you can have a better chance to get a mortgage.
