Preparing my credit file for a mortgage application

Chris_Sheffield

Hi,

I’m looking for advice on how to prepare my credit rating for applying for a mortgage in six months’ time?

A bit of financial info:
I have two defaults (satisfied) on my credit file. Default 1 is about to drop off my file in March and default 2 (old phone contract) is going to be four years old in May.

I’ve been working hard to improve my credit rating over the last couple of years and I’ve seen my score/rating slowly increase from poor to average across all the major credit rating sites.

I met with a mortgage advisor last summer and he basically told me to pay everything off and close old accounts down. So that’s what I did - I paid off my credit card in full and closed it down in November 2016.

This has drastically reduced my credit score to poor again, and after investigating I’ve noticed that I’ve made a mistake in closing the credit card because: a) it was my longest line of credit b) although the balance on the card was now zero, closing it increased my credit utilisation ratio.

I’ve tried to rectify this by paying off my phone contract in full (the only debt on there) and hopefully this will improve my credit utilisation ratio and my overall rating.

My question is: should I apply for another credit card to increase my credit utilisation ratio?

As we’d be looking at applying for a mortgage in June/July, the information I’ve seen on here states not to apply for any credit so close to applying for a mortgage.

But I’m worried my credit rating/score won’t improve and we’ll get to June and they’ll advise me to do this anyway.

Any feedback would be great!

Cheers,
Chris

ellison007

Hi, I was in a similar position; I opened up an aqua credit card and paid off the balance in full every month. My credit score increased. This was 9 months prior to mortgage app tho'. You're correct, closing the credit card was probably a mistake. Definitely wait for the March default to drop off. Also try challenging the mobile phone default. I had one and managed to successfully delete it. Took 2 months tho' of endless email exchange.


Best of luck.

Chris_Sheffield

Thanks for the quick reply!

The best I can do with the active default is to put a notice of correction on it. The devastating thing is it’s only for £40! Long story cut short is I disagreed with a final charge on my mobile phone contract and due to my stubborn young nature, I refused to pay it and they sold it to a debt collection company – if I could go back in time and slap myself in the face I would

I’m just gutted that all the hard work of improving my credit report has been undone. I’ve paid off all my debt and closing that credit account has resulted in me taking two steps back – but when a ‘professional’ advises you to do this, then you think you’re making the right decision.
Also, I’ve tried re-opening my account but Barclaycard said I’d have to apply for the credit card again.