Why your credit profile matters
A solid credit profile often determines whether you get a competitive mortgage rate or find your loan application turned down. Lenders use your credit report to judge how likely you are to repay. The better the profile, the lower your interest and the more choices you’ll have when house hunting.
Start early: check and understand your report
Order your credit report and score from the major agencies well before you apply — ideally 3–6 months in advance. Look for:
- Recent delinquencies or collections
- High balances on revolving accounts
- Unknown accounts or identity errors
- Public records such as bankruptcies or liens
Fix errors and disputes quickly
If you find mistakes, file a dispute with the credit bureau and the creditor. Correcting errors can raise your score and prevent unnecessary delays. Keep documentation of payments, statements, and any communications until the issue is resolved.
Lower credit utilisation and pay down high-cost debt
Credit utilisation — the percentage of available revolving credit you’re using — strongly affects scores. Aim to keep utilisation under 30%, and lower if possible. Focus on paying off high-interest cards first to reduce monthly obligations and improve your debt-to-income ratio.
Avoid new credit and big purchases close to application
New loans or large purchases can lower your score and increase your monthly debt commitments. Don’t open new accounts or apply for extra credit in the months before you seek a mortgage. Likewise, avoid co-signing loans that could add to your reported debt.
Build a reliable credit history
Long-standing accounts in good standing help. If you have limited history, consider keeping older accounts open and using a small, regular charge on a card paid off monthly. Timely payments are the single most important factor lenders assess.
Prepare documents and consider professional help
Gather wage slips, tax returns, bank statements and explanations for any credit issues. If your situation is complex, a mortgage broker or certified credit counselor can help prioritise fixes and present your profile in the best light to lenders.
Simple pre-application checklist
- Check reports: Review at least three months before applying.
- Fix errors: Dispute inaccuracies immediately.
- Reduce balances: Lower utilisation under 30%.
- Avoid new credit: No new accounts or big purchases.
- Document everything: Have pay stubs and statements ready.
Final thought
Improving your credit profile takes time, but even small steps can make a big difference to the mortgage you qualify for. Start early, stay organised, and focus on consistent, on-time payments to maximise your chances of approval.