Showing off your punctuality for paying bills on time is a great way to impress a lender. Under the new comprehensive credit reporting regime (CCR), lenders can see the last 24 months of your repayment history. In the past, they could only see defaults, judgement and bankruptcies, so late payments went under the radar.
With this more detailed and balanced picture of your credit history, lenders can be selective about which borrowers they approve for loans. Regularly meeting repayment due dates will help improve your credit score and position yourself as a desirable borrower. This can open the way to better interest rates and more competitive loans.
If you have a poor track record for on-time payments, now is the time to make a fresh start. Demonstrate that you take debt seriously by paying off any outstanding bills and repayments before you apply for a loan. It’s preferable for a lender to see a paid default rather than an unpaid default.
Be aware lenders can see whether you have made the minimum payment required for accounts like credit cards, home loans and personal loans. They can’t see payment history for your phone, gas, electricity, water or any other utility.
Payments that are more than two weeks overdue are listed as late repayments and remain on your credit file for two years.
This ends our series of Fast Home Loan Approval tips. Put all six tips together to fast track your journey from mortgage application to approval.