First Time Buyer Tips: 5 Ways To Improve Your Credit Score

First Time Buyer Tips: Credit Score On Mobile Device

If you are looking to get onto the property ladder or dream of becoming a property investor, your credit score will play a huge role. It can impact whether you are able to borrow, how much and the rates available to you. In this blog post, we share practical first time buyer tips to help you boost your credit score.  

1. Use credit monitoring platforms  

There are many credit monitoring platforms such as Experian and Credit Karma which allow you to keep track of your credit score. Not to mention, many of such platforms are available for free and provide you with regular tips and tailored updates to help you improve your credit score. It’s worth noting that excessively checking your credit score or doing ‘hard checks’ can also negatively impact your score. 

2. Make payments or repayments on time  

Making payments or repayments on time is a simple yet effective way to build your credit score. It ultimately helps build confidence amongst lenders as it indicates to them that you can effectively manage your finances.  

3. Keep credit usage low 

One of the most important first-time buyer tips to help you boost your credit score is to keep credit usage low. Having high credit usage indicates to lenders that you are struggling to manage your finances. Ultimately, this can impact lenders’ decisions negatively.  

According to Experian, borrowing more than 90% of the limit on a credit card can knock 50 points off your Experian credit score while keeping your credit balance well below this, will boost your credit score.   

4. Where possible, avoid moving homes a lot  

You’ve likely heard the myth that where you live can impact your credit score. Luckily, according to Clearscore, this simply isn’t true. Moving homes numerous times within a short period however can indicate instability to lenders which can negatively influence their decision to give you credit. In the event that you have recently moved or plan to move, the key is to keep your information accurate and up to date.  

5. Avoid payday loans 

Frequent use of payday loans often indicates poor money management to lenders. Particularly when it comes to mortgages, payday loans can have an adverse impact on your application. In fact, many lenders have been known to refuse anyone with a history of using payday loans.  

We hope out first time buyer tips have provided you with practical ways to boost your credit scores. If you are interested in launching or growing your own property investment business, get started for free here 

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