Repairing Credit Could Hold The Key For Help to Buy Hopefuls

New research from credit reference agency, Experian, suggests that the structure of the property market is changing once again.

Many would-be home owners, dubbed the ‘Help To Buy Hopefuls’ will be applying to the Government’s Help To Buy initiative in 2014. Experian CreditExpert has found that there will be even more Help to Buy Hopefuls than first estimated, with two-fifths of the 20-40 age group planning to apply. According to Sky News early reports show that in the first month, the scheme had received applications from more than 2,000 prospective buyers.

In a Better Position

Many of these hopefuls would be in a better position for their purchase if a little time was invested in researching and understanding their credit history before applying. A little TLC given to your credit report before making an application to the scheme could save disappointment further down the line. Simply checking their credit could have made the difference between getting accepted onto the scheme or not.

According to Experian’s insight, the average owed on credit by Help to Buy Hopefuls is approximately £4,600, which increases steadily with age, 35-40-year-olds owing £5,240 compared to 20-24-year-olds’ £4,390. Regionally, the East Midlands has the highest credit owed (£5,800), with the South East the lowest (£3,940) (Experian Insight Report, January 2014).

The insight report goes on to tell us how 25% of the Help to Buy Hopefuls have never checked their credit report and don’t fully understand how their history of managing credit could have an impact on their acceptance into the Help to Buy scheme.

Making sure that your information is up to date and accurate is key to getting a fair decision from your lender. Using Experian CreditExpert can highlight expired linked accounts that had been forgotten about. You can apply to have the accounts unlinked and possibly detach yourself from a past partner or the bad credit history of a family member in difficulty.

You can use a trial to investigate your credit to find out if anyone has registered any defaults or a County Court Judgement (CCJ) against you and pinpoint any credit searches or items for dispute, as well as long since settled accounts that should be marked as such.

In today’s climate, lenders are reliant on information from applicants’ credit reports before approving finance and mortgage applications. Risk assessment on loans is something lenders carry out to protect themselves from defaulted payments from borrowers with overstretched finances.

There are simple factors that can also affect these decisions, highlighted in the report is the fact that 40% of the Help to Buy Hopefuls are not listed as living at their current address. This seemingly simple oversight will adversely affect their credit rating. Electoral role data forms part of the lending criteria.

Simply accessing and checking your account details are up to date could be all you need to do to give yourself the best chance at securing your future dream home.

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