If you're looking to move house, there's lots to think about.
If you're buying, you need to deal with estate agents, try to sell your existing property if you have one, work out how much you're going to have to spend on things like Stamp Duty. While if you're renting you need to consider your lease, perhaps deal with a new bunch of letting agents.
One thing that may be overlooked though is the importance of checking your credit score – and if it's not great, doing something about it.
The importance of a good credit score if you're buying
Chances are if you're buying a property you will need to make use of a mortgage.
Now is a pretty great time to get a mortgage. The rates on offer have never been so low, thanks in no small part to the Bank of England's Funding for Lending scheme which allows lenders to get their hands on cash cheaply that they can then lend on to me and you.
But a cheap mortgage is still a mortgage – it's the biggest loan you'll ever take out. As a result, lenders are rather keen on making sure they only lend to people that are actually going to be able to pay it back.
The importance of a good credit score if you're renting
All good landlords take steps to ensure they are only letting their properties to tenants who are going to pay the rent every month. And most of the time this will involve checking your credit record to see just how reliable you are likely to be.
As a result, you want to look as much like the perfect tenant as possible!
How to check your credit score
There are a number of sites which offer you the chance to check your credit record, like Experian, Equifax and Noddle.
You can get a free trial with Experian through Lovemoney. But remember you will be charged at the end of 30 days so if you aren't interested in continuing, you'll need to call Experian to cancel.
What's in your credit record?
Your credit record will generally include most or all of the following:
- Your full name and address
- Whether you are on the electoral roll at this address
- How much your currently owe any lenders
- Details of any joint products you hold, and details on the person you hold them with
- Any late or missed payments
- Whether you have been subject to County Court Judgments, been declared bankrupt, entered an Individual Voluntary Arrangement or had your home repossessed
Now go through your credit record in detail. Make sure that all of the records are correct – you'll be amazed how often there are strange little errors on there, all of which can damage your chances with your new property.
Sometimes these errors are something fairly small, like an account being linked to an old address, but they may be more significant like a missed payment or debt default. You can complain to the lender, as well as ask the credit reference agency to query the mistake on your behalf. If this is unsuccessful, your next port of call should be the Financial Ombudsman Service.
If that still doesn't fix things, you can add a notice of correction, This is a 200-word statement which explains exactly what happened. It will then be flagged up any time you apply for credit.
How to improve it
So you've given your credit record a scan and you realise that you don't look quite the perfect borrower or tenant.
There are plenty of things you can do to improve your score, from ensuring you are on the electoral roll to ditching old credit cards you don't use anymore.
Check out Ten simple steps to improve your credit record for a full run down.
Get a free trial with Experian through Lovemoney.