Best approach to improve credit rating?

gemma573

Hi all you knowledgeable lot, I'm just hoping that someone might be able to offer any gems of wisdom.

My partner and I are currently in a house that has a mortgage solely in his name. We're starting to think about moving
and we'd like to get a joint mortgage so that we can use my salary as well. The problem is that I have recently checked my credit rating and it's 'poor'. The reasons for this seem to be two-fold - 1. a default from several years ago. It's now satisfied, I fully accept responsibility and it was just down to disorganisation and mismanagement of a credit card whilst a student, and 2. my low credit limits.

Number 2 seems to be a bit of a catch-22 situation - I assume my credit limits won't be raised while I have a poor credit rating, and I
won't get a good credit rating while the limits are low.

So I'm hoping for some advice in response to two questions -

1. My partner has an excellent credit rating. If we were to become linked financially I assume that mine would receive a boost, but would it also bring his down? We can't risk him not being able to get the next mortgage even if it has to be him alone,

2. What can I do to improve my credit rating? I find it quite astonishing that a single default from years ago would affect it so badly - everything else since has been paid on time, I'm on the electoral roll and no recent credit searches. I assume it's just a matter of being patient, but is there anything at
all I can do to speed up the process?

Many Thanks to anyone who can offer any advice.

Tixy

If you become linked financially it won't positively affect your ability to get credit. It will very likely negatively affect him. While ever your default shows avoid any joint accounts/joint loans / mortgage etc.

How old is your default? how soon will it drop off? Until its gone there is not a lot else you can do to improve things. Will you be thinking of moving before the default has dropped off.

The second item re low limits are not going to stop you being able to get credit. I wouldn't worry about this at the moment. Except to try to ensure you are not using a high percentage of your credit limits, ideally to ensure you repay everything in full each month and to not use an overdraft regularly.

gemma573

Thanks for the advice. It's about 3 years old, so halfway there I suppose! We were hoping to move before it will drop off. I don't know a lot about mortgages, is it quite simply a no-go if there's a default? Even if it's only one party to a joint mortgage? My parents would be able to act as guarantors if you can do that kind of thing and it would help.

It's very disappointing that a silly mistake in my past with a relatively small amount of money could scupper our future plans.

Tixy

You should be able to get a mortgage with a single settled default, but might well find that you need to go to a mortgage broker to find a suitable lender, which probably won't be the main high street lenders and who will probably require a higher % deposit and not be at the most competitive APR.

Certainly be worth talking to an independant mortgage broker with a copy of your credit file.

Obviously once you have a joint mortgage you'd become financially linked - and this could impact on partners ability to get other new credit.