Mortgage costs can be a significant financial burden, and what if you could save thousands of pounds by making a simple change to your credit report? Aaron Peake, a personal finance expert at CredAbility, has revealed that thousands of householders are overpaying their mortgage by thousands of pounds due to a credit report error.
Understanding Credit Reports
In the UK, adults have three credit reports, and each can be slightly different. The main credit reference agencies in the UK are Equifax, Experian, and TransUnion. One key reason purchasers get caught out is not realising that there isn’t just one credit score. For instance, some lenders only check one credit report, so it’s essential to check all three to ensure accuracy.
- Equifax
- Experian
- TransUnion
The Impact of Credit Report Errors
Aaron Peake explains that a credit report error can have a significant impact on your mortgage costs. For example, if you have a £200,000 mortgage over 25 years and are offered a mortgage at 4% interest, but your score is lower and you’re offered 7% instead, that’s an extra £430 a month, or more than £129,000 over the full term of your mortgage.
| Interest Rate | Extra Monthly Payment | Total Extra Payment |
|---|---|---|
| 4% | £430 | £129,000 |
| 7% | £430 | £129,000 |
Five Steps to Boost Your Credit Score
1. Check all three reports: Aaron warns that it’s essential to review all three of your credit reports to ensure accuracy. You can do this for free through services like CredAbility or TotallyMoney, and it won’t affect your score. 2. Fix any errors: Aaron advises checking for out-of-date addresses, duplicate accounts, or incorrect payment information. If you spot anything wrong, contact the credit reference agency and get it corrected. That alone could help you qualify for a better deal. 3. Register to vote: Aaron says that registering to vote can give your score a noticeable nudge in the right direction. It’s quick, free, and can help lenders confirm your identity and address. 4. Build a credit history: Aaron recommends using a credit card little and often and paying it off in full each month. You can also set up direct debits for all your bills to ensure everything’s paid on time. 5. Hold off on new applications: Aaron advises avoiding new credit applications, as they can leave a mark on your report for six months.
“The gap between a great credit score and a poor one could cost you thousands over the course of your mortgage,” says Aaron Peake.
news is a contributor at CreditOfficer. We are committed to providing well-researched, accurate, and valuable content to our readers.
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