In the previous part of this article I introduced the idea of improving your credit rating in order to help get a mortgage, also covering the first two of my five tips for improving your rating: Checking your credit score and establishing bank accounts properly. This list continues with how you can improve your credit rating by using someone else’s positive record. Co-sign or become a joint account holder If this is your first try for a mortgage then considering the current market you are going to find it hard getting a deal let alone a good one. Typically younger property buyers may already have other debts such as credit cards or student loans and so getting another loan (in the form of a mortgage) may be a tough proposition. But just because you have a weak credit score doesn’t mean you can’t â€borrow†someone else’s. By being added to a credit card as a joint account user you can effectively gain a more positive credit score, the same would apply when getting someone else to co-sign for a loan. In some cases this can help get you a larger sum than you normally would on your own. It isn’t unheard of for parents to co-sign for their offspring these days as the idea of being in debt is a recent phenomenon and most parents will have a very good credit rating. Obviously the benefits and deficits are based on how well your parents rating are, if they have an excellent record it can help inject some positive marks on your rating, conversely if they have had a few bad spells this will be transferred to your record too. Get an instalment loan This option admittedly is a better idea for people who want to lend for different reasons to getting a mortgage, an instalment loan can actually be a mortgage but if you are having trouble getting one you can go for other instalment loans such as auto loans where you loan money to buy a new car, the best thing about this is that you get to buy a new car! An instalment loan is repaid by a set number of periodic (normally monthly) fixed amounts. Aside from this instalment loans are one of the two best mixes of credit to have, the other being revolving accounts such as lines of credit and credit cards. The advantage of this is that you can keep the length of these loans down to one or two years so that you can cut down on the amount of interest you’ll pay. Get a secured credit card Applying for a credit card in order to help start your credit rating may be a bit of a stumbling block for some people. Some lenders will be reluctant to accept new applications these days and so you may need to take a different route, the secured route. Yes you can get a secured credit card, if you’ve heard of secured loans you’ll get the general premise of the secured borrowing process. With a secured credit card you make a deposit to the lender which normally forms your credit limit. People who take this option will have to be careful as this method can sometimes incur massive interest rates and application fees. Essentially you need to consider whether this will help you improve your credit score and your ability to get a mortgage or if it’s going to hinder your progress. So there you have it, five tips to help improve your credit rating, following these tips should help improve your chances of getting a mortgage as lenders check credit ratings when considering new applications. As well as this having a good credit rating will help in other areas as previously mentioned so it is good practice to have a good credit rating. There are many other ways you can improve your credit score and these are only five ways you can act.
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