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Buying an Investment Property: Key Steps to Secure a Profitable Investment

Unlike many other investments, real estate offers income through two main streams – rental returns and capital appreciation. So, with the right approach, you’ll be able to generate consistent cash flow while watching the value of your property naturally increase over time.

Like any major investment, though, buying an investment property requires careful planning and precise decision-making. 

1. Define Your Investment Goals

Get clear on your investment goals before jumping into the market – are you looking for monthly rental income, long-term capital growth, or both? Either way, you need to make your investment goals match your broader financial plans, whether that’s earning passive income or building long-term wealth.

  • Rental Income: You’ll want a property somewhere with strong tenant demand – think close to schools, public transport, or even business hubs, for example. These are stable properties that can deliver a steady cash flow, covering not just your mortgage payments but providing extra income, too. 
  • Capital Growth: Think more about areas that look poised for price increases – whether that’s down to rising demand or new infrastructure projects. This is more of an equity-driven strategy than relying solely on rental income, so you can use this for future investments or simply to sell at a profit later on. 
  • A Mix of Both: Look for emerging suburbs where property prices are yet to peak – these will give you a good combination of rental income and future growth potential.   

2.  Research Property Markets

Now that you’ve nailed down your goals, dive into the research side of things. The location of your investment property naturally plays a big role in how much profit you’ll take home, so compare a range of different markets – both within your country and internationally:

  • Australia: Sydney and Melbourne are well-known for capital growth, but property prices have long been high here – you could be better off choosing cities like Brisbane if you want a combination of rental yield and growth since it’s somewhere where demand is rising rather than already fully established. 
  • United Kingdom: London remains one of the biggest hotspots in Europe for investors, but, like Sydney, rental yields are usually lower due to high property prices. Northern cities like Manchester or Liverpool tend to offer better yields while still having solid growth potential. 
  • Canada: Toronto and Vancouver are popular in terms of long-term appreciation – you might prefer somewhere like Calgary or Halifax if you want more affordable opportunities, though.

Wherever you invest, just ensure that you’re researching:

  • Local market trends
  • Population growth
  • Infrastructure projects
  • Demand for rental properties

3. Understand Financing Options

Unless you’re immensely wealthy, financing is a key part of any property investment. This makes choosing the right loan structure – one that matches your financial goals – very important, as the wrong financing can easily eat into your profits.

Start by looking through different mortgage options: investment property loans usually have higher interest rates than residential mortgages, but there are still ways you can structure your loan so it has better cash flow:

  • Interest-only Loans: You just need to pay the interest initially with these loans, so this frees up cash for other investments and generally keeps your repayments low. Remember that you won’t be building any equity during this period, though. 
  • Fixed vs. Variable Rates: Fixed-rate mortgages are the more stable option since they lock in your repayments for a set period – variable rates, while giving you potentially lower costs, can cause higher repayments if interest rates go up.

If you’re planning on buying internationally, it’s imperative you know how these mortgages work in those markets since financing options/lending requirements vary if you were to buy in Spain vs the US, for instance.

4. Calculate Potential Returns

Once you’ve identified potential properties, it’s time to run the numbers so that you’ve got a clear picture of the property’s profitability. 

Start with the expected rental income. Research what similar properties in the area are renting for and factor in any seasonal changes (in tourist hotspots, for instance). Then, subtract ongoing costs like:

  • Property management fees
  • Maintenance and repairs
  • Insurance
  • Property taxes
  • Mortgage repayments
  • Possible vacancy periods where you might not have a tenant

A good rule of thumb here is to aim for properties with positive cash flow, meaning the rental income covers all your costs and still leaves some profit. If you’re more focused on capital growth, work out how much the property’s value might appreciate over the years.

5. Check Local Laws and Tax Implications

Taxes and regulations can have major impacts on your bottom line – especially if you’re buying in a foreign market that has different rules on property ownership.

  • Capital Gains Tax: The tax you pay on the money you make from selling an investment property – the specific rate varies depending on where it’s located and how long you’ve had it. Certain countries even offer tax incentives if you hold the property long-term. 
  • Rental Income Tax: Most governments tax whatever you earn from renting out a property. However, there are still a few deductions available that are worth learning about, from property management fees to maintenance costs.

Watch out for potential double taxation if you’re investing overseas – where you’re taxed both in the country you bought the property in and your home country. It can be helpful to work with a tax advisor at this point to avoid any surprises.

6. Consider the Impact of Currency Fluctuations

If you’re investing in another country, currency fluctuations can have a major impact on your returns and generally add an extra layer of risk. 

For instance, if the currency of the country you’re investing in – e.g. AUD – weakens against your home currency, your rental income could be worth less when converted back. The inverse is also true, though, so it could actually end up doing you a favour.

7. Work with a Mortgage Broker or Advisor

If you’re a first-time investor or are buying internationally, the financing process can be relatively complex, and you’ll quickly see how having a mortgage broker or financial advisor would help. 

Brokers with experience in property investments hold your hand through the whole loan application process, so this helps with finding better interest rates and knowing what loan structures are best for your goals.

They should also assist you with securing pre-approval for a loan – where the bank agrees to lend you a certain amount of money before actually buying the property – which gives you a huge advantage when making an offer on a property.

Conclusion

Ultimately, property investment is one of the most lucrative ways of generating income, but you need a great deal of planning to actually make it profitable – meaning you need to:

  • Know your investment goals in advance
  • Understand the market you’re investing in
  • Understand financing 
  • Be aware of specific rules for property investment in different countries 

Only then do you have a chance of making money in an otherwise risky and time-consuming industry.

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How to Choose a Mortgage Broker: Key Factors to Consider

A good broker will not only simplify the process of securing a loan but will also save you a lot of money and headaches – which is especially true if you’re thinking about buying property internationally.

When you’re dealing with different countries’ rules and loan structures, you need the broker to play a much more critical role in helping you find the best deal than you would if you were buying locally since you’re, presumably, a lot less experienced in foreign markets.

1. Assess Their Experience and Expertise

Brokers that actually have experience in your target market – whether it’s domestic or international – generally make all the difference. Specifically for when you’re buying property in another country, though, you need them to have a track record with handling international mortgages.

For instance, buying a home in Italy while you’re currently living in Portugal is a completely different ballgame than if you just purchased locally. So, having a broker who has got real experience in handling these kinds of deals is going to let you handle tricky issues like local regulations and tax laws far more effectively.

2. Check Broker Accreditation and Licences

Don’t assume that your broker is qualified just because they sound confident and articulate – make sure they’re licensed and accredited. Depending on where you’re buying, this means different things:

  • In the UK, brokers need to be registered by the Financial Conduct Authority (FCA) 
  • In Australia, they should be accredited with the Australian Securities and Investments Commission (ASIC)
  • In the US, they need state-specific licences

If your deal involves multiple different countries, you need to look for a broker who has got the necessary credentials for each region that you’re interested in buying in. This isn’t just about paperwork, either – it ensures that the broker is following the laws and regulations in any of those countries and can actually be held accountable if anything were to go wrong. So, do your homework and verify their qualifications before you go any further with them.

3. Understand the Range of Lenders They Work With

Not all brokers have access to the same pool of lenders – some work with just a few banks, while others usually have a larger network. The more lenders your broker has connections with, the more options you’ll have at your disposal (and more options mean better loan terms and competitive interest rates!).

Ask them about how many lenders they work with and whether they focus on big banks, smaller institutions, or even both. This is even more important if you’re looking for an international mortgage since brokers with a broad network will give you a lot more flexibility – subsequently giving you a better chance of locking in more favourable terms.

4. Ask About Fees and Commission Structures

You don’t want any kind of surprise when it comes to costs, so get clear on how your broker actually makes money. Some of them will charge you directly, while others might get paid by the lender through commissions. Ask upfront about fees so you know exactly what you’re getting into.

Be careful at this stage, though; sometimes, a broker might push certain loans on you because they’ll get a bigger commission, so always ask them to explain their compensation structure. If it turns out that there’s a conflict of interest, you definitely want to know about this before you make any major decisions.

5. Evaluate Their Communication and Support

A good broker should always be easy to reach – whether it’s by phone or visiting in person – and willing to guide you through the entire process. How they communicate with you is a big deal, so from the first interaction you have, notice how fast they respond and how clearly they explain certain things.

You want someone who is not going to leave you hanging when you have questions or concerns – this is especially true if you’re buying internationally, since time zones and differing laws can add a layer of complexity. So, having a broker who’s responsive and supportive is going to save you a lot of stress.

6. Look for Specialisation in Cross-Border Mortgages

If you’re buying property internationally, you can’t settle for a broker who only understands local markets. Cross-border deals come with a different set of challenges than local markets, whether it’s managing foreign income or dealing with differing tax systems and currency fluctuations. You need someone who actually specialises in international mortgages and knows how to navigate these kinds of issues.

Moreover, a good international broker is likely to already know some lenders who are willing to work with foreign buyers – which is crucial since not all lenders are comfortable with cross-border clients. Ultimately, a broker with this kind of expertise is going to save you time and help you avoid any expensive pitfalls, so not only will you get the best deals, but you’ll stay compliant with all the local regulations, too.

7. Read Reviews and Seek Recommendations

Online reviews and personal referrals are usually gold when you are picking a broker, so make sure you are taking the time to read what their past clients have to say – it helps if you use a platform like Google Reviews or Trustpilot for this. Some of the good signs that you want to look out for include things like:

  • Great communication skills
  • Highly responsive 
  • Able to secure good loans 
  • If the past clients’ felt supported and the broker explained things clearly

At the same time, though, check if there are any recurring complaints – from hidden fees to poor customer service once the deal is closed. Don’t hesitate to ask your friends, family, or colleagues for any individual recommendations, too, since it’s usually a strong sign you’ll be in good hands if someone you trust has had a good experience with that broker.

If possible, seek out people who’ve dealt with similar loans in the past, especially international ones, since that kind of experience is generally going to give you a better sense of what to expect from them.

Conclusion

Choosing the right mortgage broker isn’t just about finding someone who is going to help you out with paperwork; it’s about finding a partner who will actually work to get you the best possible deal and generally make the lending process smooth.

Whether you’re thinking about buying property locally or internationally, just make sure you keep some of these factors in mind:

  • Experience
  • Accreditation
  • Lender network
  • Fee structure
  • Communication
  • Cross-border expertise 
  • Reputation

By doing your due diligence and picking a broker who genuinely fits all of these boxes, you will be able to set yourself up for a far better mortgage experience – and potentially save yourself a lot of time, money, and stress in the long run.

Choosing the right broker can make all the difference in securing your dream property. With Upscore’s Finance Passport, we connect you with expert brokers across borders to make your international mortgage journey seamless. Get started today and explore your options!

How to Increase Borrowing Capacity: 7 Key Strategies

With international lenders generally imposing stricter lending rules for foreign buyers – whether you’re trying to buy property in Spain, Australia, or anywhere in between – being able to boost your borrowing capacity is a must as it gives you access to:

  • Larger loans
  • Better interest rates
  • More favourable terms

Your borrowing capacity determines how much a lender is going to give you based on things like your income, credit history, and debt – so, when you have a higher borrowing capacity, it essentially makes it easier to secure the home you want.

1. Improve Your Credit Score

Having a strong credit score not only helps you qualify for a mortgage in the first place but also means you’ll unlock lower interest rates and generally better loan terms – here’s how you’re able to give your credit score a boost:

  • Pay bills on time: Late payments will naturally hurt your credit score. Staying on top of all your bills -from utilities to credit cards – builds a solid track record
  • Lower credit card balances: Try to use less than 30% of your available credit since high balances can easily drag your score down
  • Limit credit inquiries: Every time you apply for new credit, your credit score is impacted. Make sure you only apply for credit when you actually need it and never take on new debt right before applying for a mortgage  

2.  Reduce Existing Debt

Lenders care about your debt-to-income ratio (DTI) – how much you owe compared to how much you actually make – since it generally shows them that you’re in control of your finances and can handle more borrowing. So, the less debt you have, the more they’ll feel comfortable lending to you:

  • Pay off high-interest loans: You should focus on clearing credit cards or personal loans first since they usually come with much higher rates than other types of loans
  • Consolidate debts: Roll all your debts into one loan with a lower interest rate so your overall monthly payments are lower (there are plenty of banks that offer this service) as it helps your debt-to-income ratio
  • Don’t take on new debt: Hold off on making any big purchases on finance or opening new lines of credit before you apply for a mortgage

3.  Increase Your Income

More income typically means that you can qualify for bigger loans, and although it’s easier said than done to achieve that, it is still one of the simplest ways you can increase your buying capacity. 

Keep in mind that lenders tend to prefer stable and long-term income growth rather than a one-off lump sum of cash falling onto your lap, so any changes to your wage here need to be consistent:

  • Ask for a raise: If you’ve been at your current job for a while and have a good track record, don’t be shy with asking for a pay bump
  • Pick up side gigs: Freelancing or part-time work will also give you a boost, and lenders definitely take extra income into account
  • Get rental income: If you happen to own property and it’s possible to rent out a room – even using Airbnb for additional income – plenty of lenders will factor this in 

4.  Extend the Loan Term

Opting for a longer loan term in general is another clever way of increasing how much you can borrow, since spreading the loan over more years means your monthly payments will drop. As such, lenders are usually a lot more comfortable with approving a higher amount.

For instance, going from a 15-year loan to a 30-year loan will drastically reduce your monthly bill. Yes, you’ll naturally pay more interest over time, but it means you’ll qualify for a bigger loan right now.

The extra interest factor here is why it’s not the first suggestion on this list, but it’s still a useful trick if you’re trying to buy in an expensive market or just need a bit more wiggle room in your budget.

5.  Provide a Larger Deposit

A bigger down payment is going to lower the amount that you actually need to borrow as well as reduce the loan-to-value (LTV) ratio – lenders love low LTV ratios because it makes their loans far less risky. The lower the LTV, the more they will be willing to lend you.

As an example, if you put down 20% instead of just 10%, it shows that you’re financially stable enough to be without that kind of money, naturally giving them more confidence in you as a lender. Aside from that, larger deposits can sometimes even lead to better interest rates, so this will save you money over the long term, too.

Think about what we mentioned in an earlier step about increasing your income – if you can, try to save a bit of that extra money so you can put it into making a larger deposit. It can go a long way in boosting your borrowing power.

6.  Consider Joint Applications

If you can apply with someone else – whether that’s a spouse or a partner – it can seriously bump up your borrowing capacity. When you apply jointly, lenders take a look at both incomes, so this will increase how much they’ll lend. 

This strategy definitely isn’t for everybody, but if you are considering it, just make sure that your co-borrower has solid credit, since both of your financial histories are going to be considered here.

  • Combined income: Getting another part time job is a decent start, but two full time incomes are obviously going to be better than one – especially in pricier real estate markets where a single salary probably isn’t going to cut it
  • Shared debt: If your partner has less debt or even just a higher income than you, their financial situation can actually balance yours out on the application

7.  Minimise Living Expenses

Lenders will usually take a close look at your monthly expenses so they can see how much money you’ve got left over to make your mortgage payments. 

If you cut back on any unnecessary expenses – that subscription service you don’t even use any more, for instance – then you’ll free up more room in your budget and show lenders you’ll be able to handle a bigger loan since the less you’re spending, the more you can borrow.

  • Stick to a budget: Track where your money is going and look for areas where you’re able to reduce, like dining out frequently.
  • Lower bills: Basic things like switching to energy-efficient options or negotiating with service providers can shave down some of your monthly costs
  • Delay big purchases: Wait a bit before you buy expensive items like cars or taking vacations until after you’ve secured your mortgage

Conclusion

Maximising your borrowing capacity is going to make all the difference when it comes to getting the mortgage that you want, so whether it’s:

  • Improving your credit score
  • Paying down debt
  • Adjusting your loan terms
  • Increasing your income

All of these strategies are going to put you in a much stronger financial position and will give you access to better interest rates and terms.

Looking to increase your borrowing power? With Upscore’s Finance Passport, we help you unlock better loan opportunities across borders. Check your credit score today and see how we can help you maximise your borrowing capacity!

9 Essential Questions to Ask Your Mortgage Broker for the Best Deal

Securing a mortgage can be hard enough, let alone in an international market, so you’ll need to ask the right questions to get the best possible deal – especially with things like interest rates and financial obligations varying from country to country.

Mortgage brokers are here to help, but you can easily still incur hidden costs or miss opportunities if you don’t ask the following questions:

1. What Mortgage Products Do You Offer?

Mortgage brokers will offer you various types of loan products, so you’ll need to consider your financial situation and goals to get the right one:

  • Fixed-Rate Mortgages: Your interest rates will stay the same throughout the life of the loan with these loans, so they’re ideal if you plan on staying in your home long-term and want more stability with your monthly payments.
  • Variable-Rate Mortgages: These mortgages typically start with lower rates, but they fluctuate with the market, meaning the amount you pay can end up increasing drastically if interest rates rise.
  • Interest-Only Loans: You only need to pay the interest on your mortgage for a set period with this setup, so this can be helpful if you prefer lower payments upfront. That said, you’ll still need to pay off the principal at some point, which will naturally increase your payments later on.

2. What are the Fees and Charges Involved?

Your broker will undoubtedly let you know about the most obvious costs – the interest rate, for example – but make sure that they’re upfront about all the other costs by asking about:

  • Loan Establishment Fees: These are the costs just to set up your mortgage
  • Ongoing Service Fees: Loans sometimes come with monthly or even yearly fees that can definitely add up over time
  • Early Repayment Penalties: Check if you’ll get hit with any extra charges if you plan on paying off your loan early 

You might think you know all the fees you’ll incur in your home country, but oftentimes, hidden costs can be higher or just generally structured differently than what you’re used to when dealing with mortgages abroad.

3. Can You Help with Cross-Border Mortgages?

Different countries have different rules, and not every broker is going to be equipped to handle that. If you’re looking at property in the following countries, double check that your broker actually has experience with cross-border mortgages:

Ask them specifically about how they’ll handle things like currency exchange rates and foreign taxes – brokers who actually understand the nuances of international mortgages won’t only save you time but potentially thousands of pounds.

4. What is the Best Interest Rate Available for My Profile?

Interest rates aren’t usually set in stone since they vary based on your financial profile, including things like your:

Good brokers should be shopping around to get you the best deal anyway, but it definitely doesn’t hurt to ask if there’s any way that you’re able to improve your rate. You might only need to make a small improvement in your credit score or reduce a few debts and you’ve now got a lower interest rate. 

Even shaving off a fraction of a percent can end up making a huge difference over the life of the loan, so don’t be afraid to push for the best rate you can get.

5. How Much Can I Borrow Based on My Financial Situation?

Each country and lender will have different rules for how much they’re willing to lend you based on things like your credit score and income – living costs and taxes also play into this (which naturally vary from country to country).

So, your broker should be able to tell you how much you’re actually able to borrow and how they’ve arrived at that number. For instance, your borrowing limits in Australia might end up being stricter than in the US or Canada, so knowing these regional differences up front is generally going to let you plan your budget a bit smarter.

6. Do You Offer Pre-Approval Services?

Getting pre-approved for a mortgage shows sellers you’re serious, which can massively speed up the buying process – it essentially means a lender has already agreed, in principle, to lend you a certain amount based on your current financial status.

Not all brokers have strong relationships with lenders who offer pre-approval, but it’s worth asking if this is something they’re able to help you with anyway. Considering the leg up you’re getting on other buyers who don’t have it, it’s definitely worth a mention.

7. Are There Early Repayment or Refinancing Options?

If your financial situation were to change, you might want the flexibility to refinance or pay off your mortgage early. That said, not all loan products allow for this without penalties, and some of those fees for early repayments can actually be quite steep.

Ask your broker if you’ve got the option of refinancing later on or paying down your loan without incurring any extra costs; it can be super valuable to have that flexibility if you end up getting a raise or plan on moving to another country, for instance.

8. What is the Loan Approval Timeline?

You don’t want to lose out on your home just because your loan approval dragged on longer than you thought it would – the timeline for mortgage approval can vary depending on:

  • Your financial situation
  • The lender
  • Even the specific country where you’re buying property

It gets even more dragged out internationally:

  • Time zone differences
  • Legal differences
  • Banking holidays

So, see if your broker knows how long the approval process usually takes and whether they’d be able to expedite it if necessary. 

9. How Do You Handle Foreign Income or Investments?

Chances are that you’ll face more challenges when applying for a mortgage if you earn income from another country or hold significant investments abroad. Some lenders aren’t equipped to handle foreign income, or they might just require more paperwork and stricter lending criteria.

Make sure your broker knows how to deal with these kinds of situations – from guiding you on what documentation you’ll need to explaining which lenders are more flexible with foreign income or assets. 

The application process is long enough, so this will save you a lot of time and effort if you were to know this beforehand.

Conclusion

Getting a mortgage is one of the biggest financial decisions you will ever make, so it is not something you want to go into blind. Whether you plan on buying property abroad or locally, asking your mortgage broker the right questions is going to help you:

  • Avoid unnecessary fees
  • Secure a better interest rate
  • Get the flexibility you need for the future

Ultimately, it’s your money, so don’t be shy and make sure you’re getting the best deal available.

Whether you’re purchasing locally or internationally, ask the right questions and get expert advice. With Upscore’s Finance Passport, we make cross-border mortgages simple. Talk to a broker today and explore your options! 

What is a Good Credit Score?

Credit scores play a pretty significant role in the financial world and have a major influence when you’re trying to 

  • Get a loan approved 
  • Receive decent interest rates
  • Secure a rental agreement
  • Buy a home

This is a numerical representation of your creditworthiness, essentially letting lenders know how risky it would be to lend you money. As such, it’s crucial to have a solid understanding of what constitutes a “good” credit score in order to make more informed financial decisions.

Defining Credit Score

Credit scores are numerical ratings that essentially reflect how financially responsible you’ve been over the years, and it’s usually calculated by using factors like:

  • Payment history
  • Outstanding debt
  • Length of credit history
  • Types of credit accounts held

Then, lenders, including banks and credit card companies, will use this score to assess the likelihood of you actually repaying their loans. These scores range from around 300 to 850, but the specific range and definition of a “good” score tend to vary from country to country, so we’ll go through some specific examples shortly.

Basically, the higher your number on this scale, the less risky you are to lenders. 

Importance of Credit Scores in Home Buying

Purchasing your first home is a major financial milestone, and when it’s time to apply for a mortgage, that little number on your credit score is either going to open or close doors. 

Mortgage lenders need to know how reliable you are as a borrower when lending you money, so they’ll use your credit score to assess not only your eligibility for a loan but also the interest rate they’ll offer you. 

Higher credit scores, since they suggest that you can handle money responsibly, often lead to lower interest rates – this can end up saving you tens of thousands of pounds over the life of your mortgage. The inverse here is that low credit scores result in higher interest rates, possibly even preventing you from getting a loan at all. 

Your credit score is a key factor in determining how much buying power you’ve actually got when you’re looking to purchase a property.

International Credit Score Ranges

Every country’s got their own credit scoring system, so let’s break down some of the ranges and benchmarks for a few different major countries:

UK: Credit Scores Range Between 0-999 (Experian)

In the UK, one of these three credit reference agencies measure your credit score:

  • Experian
  • Equifax
  • TransUnion

Experian is one of the most commonly used agencies and has a scale between 0 and 999. They classify a good credit score to be 721 or higher, so that means if you’ve got a score within this range, you’re more than likely to be offered favourable terms on loans and mortgages.

US: Credit Scores Range Between 300-850 (FICO)

The US is different as they’ve got the ‘FICO’ model, which ranges from 300 to 850 – good scores are 670 and higher, and excellent scores start at around 740. The same general rule applies, though – good or excellent credit scores generally mean you’ll be getting much better interest rates or loan terms.

Australia: Credit Scores Range Between 0-1,200 (Equifax)

Australia mostly uses Equifax to calculate credit scores, but they’ve got the widest range out of either country we’ve mentioned so far, between 0 and 1,200. Good credit scores generally start around the 622 mark, so if you’ve got this score or higher, you shouldn’t have any bother securing a loan or negotiating better terms.

Other Countries

Still, not every country uses the same scales for measuring creditworthiness, which we can even see between the UK, the US, and Australia since they all have different ranges.

In Spain and a range of other European countries – Portugal, France, Italy, Greece – for instance, the lenders tend to focus more on repayment history rather than things like credit utilisation. 

This means that while it’s still important to pay your debts on time everywhere, the way your credit score is calculated is always going to vary slightly depending on where you live. That’s where our Finance Passport comes in handy since it helps smooth over some of these differences and lets lenders assess your credit score more uniformly across borders – thus improving your chances of securing a mortgage in a range of different countries.

How to Improve Your Credit Score

If your credit score isn’t exactly where you’d like it to be, the good news is that there are actually a handful of different ways you can improve it:

1.  Pay Bills on Time

Your payment history is one of the most influential factors for calculating your credit score – whether you’ve missed the payment entirely or it’s merely just a bit late, it’ll cause your score to drop. As such, it’s in your best interest that you’re paying the following on or before their due dates:

  • Credit cards
  • Loan payments
  • Utilities

2.  Reduce Credit Card Balances

‘Credit utilisation’ is another important term regarding credit scores, and it refers to the ratio of your current credit card debt to your credit limits. The general rule of thumb here is to never let your credit utilisation be higher than 30% – only using £3,000 if you have a credit limit of £10,000, for instance.  

This might sound a bit strange, considering you’ve been given a limit of x amount, but the way lenders see it is that you’re overly reliant on credit to fund your expenses.

3.  Avoid New Credit Inquiries

One of two inquiries might not make much of a difference, but if you’re incessantly checking your credit score in a short time period, it might suggest that you’re in financial trouble or that you’re trying to borrow beyond your means – that’s a big red flag for lenders.

4.  Monitor Your Credit Report Regularly

From incorrect payment statuses to unrecognised accounts, errors on your credit report can negatively impact your score, so ensure that you check your credit report every now and then in case there are discrepancies that you need to dispute.

Conclusion

Generally speaking, the specific criteria for what makes a good score are always going to change depending on which country you’re in, but the fundamental principles of how you keep a healthy credit score almost always stay the same – from paying your bills on time to reducing debt. 

So, don’t give yourself any trouble when it’s time to secure a mortgage or loan and keep a good credit score!

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Whether you’re looking to buy a property in the UK, US, Australia, or Canada, Upscore’s Finance Passport can help you secure the best mortgage deals across borders. Check your credit score today and start your journey with Upscore!

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