Credit score UK: 8 tips and mistakes to avoid to improve and get a good credit score - according to an expert

• Thousands of Brits risk losing homeownership opportunities by neglecting their credit scores
• Over half of mortgage lenders have reported an increase in rejected applications due to poor credit
• Jo Pocklington, MD of Purplebricks Mortgages, stresses the importance of a good credit history for mortgage approval and affordable loans
• A poor credit score can result in higher mortgage rates, making homeownership more expensive
• Pocklington, with 23 years of experience, provides guidance on maintaining a healthy credit score

Thousands of Brits risk jeopardizing their homeownership aspirations by neglecting their credit scores, says one mortgage expert.

With over half (58%) of mortgage lenders reporting an increase in rejected applications, Jo Pocklington, managing director of Purplebricks Mortgages, has highlighted eight key actions to avoid for those looking to buy their first home.

Pocklington, who has 23 years of experience assisting prospective homebuyers, says that maintaining a good credit history is crucial not only for mortgage approval but also for securing affordable loan terms.

“Your credit score is not something to take lightly,” she says, “it can make the difference between you achieving your dream of home ownership or being prevented from doing so.

“And even if your application does get approved, mortgages built on bad credit can be as much as one or two percent higher than the average deal - so it will cost you dear.”

A credit score, or credit rating, is a three-digit number that indicates how reliable you might be in repaying borrowed money. Scores typically range from 300 to 850, with a higher score indicating better creditworthiness.

Lenders use this score to evaluate the risk of lending money to a person, and a higher credit score improves your likelihood of being approved for credit and accessing the best interest rates.

Here, Pocklington shares eight straightforward tips to maintain a healthy credit score, including one commonly overlooked mistake.

Ensure you are enrolled on the electoral register

“This can impact your credit score, especially if you have a limited credit history. Credit Reference Agencies (CRAs) and other providers use the electoral roll to confirm your identity.

“Being on it is key, as it helps CRAs prevent identity fraud. Having the same address for a long period of time also shows signs of stability, which will in turn work in your favour.”

Spring clean your finances

“Even if you’re not a big spender, and aren’t in any debt, having multiple accounts and credit cards means there is potential to borrow money, and to get into debt as a result. 

“Lenders see this as a risk. You are also potentially open to fraud, as multiple accounts means you are less likely to monitor them. 

“If you have accounts you don’t use. You are far better off streamlining your accounts and closing them down.”

Keep old accounts open

“The length of time you have had your account can also work in your favour. Credit cards, or a well managed overdraft are both indicators of how reliable you are as a borrower.

“The longer you have had the account, the better you can demonstrate your financial reliability.”

Go easy on mortgage/credit applications

“If you apply once and get rejected, leave it at that. Multiple applications will affect your rating. Every time you apply for credit, the provider will run a hard credit check on you, which stays on your credit history for 12 months.

“If you apply too many times, this indicates you might be in financial trouble and lead to your credit score dropping. I always recommend checking your credit rating yourself - before you start the process officially.”

Ensure your payments are on time

“You must always be thinking of how you come across to potential lenders. Paying bills on time and in full will reflect well on you, showing you are financially responsible and can handle credit. You are essentially proving that you can be relied on to repay your debts.  

“Rent, mobile phone bills, utility bills, council tax and credit accounts - all these provide you with an opportunity to demonstrate your financial reliability. 

“Paying on time will stand you in good stead, whilst late and missed payments will affect your credit score, staying on there for six years. Failure to pay your debts, any CCJs or IVA’s will also be recorded on your credit rating for six years.”

Sign up for a Credit Builder card

“If you aren’t a credit card holder, a credit builder card is a great alternative means of building up your credit history, positively. Use it sensibly, pay off your bills every month, you can really build a profile of a reliable borrower that way.

“But watch out - if you miss a payment or overspend on your agreed limits, this can work against you.”

Regularly check your credit score

“Maybe the CRA, or maybe a provider, might have made an error about you, which has ended up on your credit rating. Keeping a close check on your credit score will help you nip any issues in the bud.

“There is also the threat of fraud that you might be completely unaware of, so regular monitoring will help alert you early on.

“Regular monitoring also means that if you’ve had issues with your credit score, you will know as soon as they have cleared, and you are primed to actively seek credit again.”

Don’t withdraw cash from your credit card

 “It may be tempting, it may be accidental, it may sometimes even be unavoidable, but a big mistake credit card users can make is using it to withdraw cash.

“Not only will you incur a charge on the card, withdrawing cash - known as a cash advance - can have a negative impact on your credit score. 

“More importantly, lenders may take a dim view of your ability to manage your finances if they see multiple cash withdrawals from a credit card. 

“This not only suggests you have poor money management, and therefore may be an unreliable mortgage customer, but it may leave you answering some awkward questions during the application process.”

We'd love to hear your thoughts and experiences! Have you faced challenges with your credit score while applying for a mortgage? Share your stories and tips in the comments section.