One of the problems that seems to keep cropping up in conversation at networking events is how difficult it is to get finance these days. People can’t get mortgages, investors can’t get development finance and even established small businesses seem to struggle. We have been asked many times how it is that we don’t seem to have this problem with our own property portfolio. Now to be truthful there is no one answer to this; but one thing you can do is monitor your credit rating and take steps to improve it where necessary. Whatever you do, do NOT pay anyone to do this for you. The only way you can do this is by YOU doing it.
The obvious stuff to do is pay off any CCJs within 1 month of them being registered, pay your repayments on time and in full etc. However there are a few more tricks which can help….
- Make sure that you are on the electoral roll. This massively increases your credit score.
- Make sure you pay everything by direct debit to ensure payment. If the payment is wrong you can always ask for the excess back. If you under pay in their mistaken opinion they can lodge it as a late payment. A surprising number of firms are very quick to register a late payment but never bother removing the notice after it has been corrected!
- Dispute ANY incorrect information – even small amounts unpaid will count against you. So get a copy of your file and then make the effort to write to the credit reference agencies and get them to correct it. It can take a while for corrections to appear and this can be time-consuming to follow up but it is well worth the effort.
- Get credit! One of the oddest things about the credit scoring system is that people who have no history of debt, because they always pay everything up front and don’t have credit cards, generally have the worst credit scores of all. It is important to build up a history of paying debt on time and in full. The easiest way to do this is to put all your shopping on the credit card and then pay it in full via direct debit.
- Go easy on credit checks. Keep them to a minimum. Unfortunately the more checks the lower the credit score. This also applies to multiple checks from mortgage companies – do your research about the mortgage product and the lenders criteria in advance so that you are unlikely to need more than one check done within a short space of time. A good mortgage broker will be able to advise you on this.
- Separate your accounts. If you have a joint account with someone who has a rubbish record then get rid of that account. Take your name off it and inform the credit agency you no longer have an account with them or are linked with them in any way!