UK Credit Education Day
If you want to avoid the highest mortgage interest rates when you have the funds to buy your own home, it’s vital you stop overspending and keep your credit file squeaky clean now, so you’re in the best position possible by the time you have your deposit saved. Whether you’re a college or university student, an apprentice, or are only in the early throes of your career, your income probably doesn’t cover much more than just your bills.
Difference Between Best & Worst Rate Mortgages
Mortgage Credit Building Tips
Don’t completely avoid credit
Although credit does get a bad rap, it shouldn’t be frowned upon. Without obtaining some credit, you won’t have a credit file on which mortgage lenders can make a decision to lend to you. It’s a good idea to sign up for a credit card, even if it has a small limit and you pay it off every month.
Avoid payday loans
There’s quite a bit of controversy about whether using payday loans will impact your credit file. Although some credit referencing agencies say they don’t count against getting a mortgage, the majority of lenders will not lend if you have regular payday loans on your account. Although there are some lenders that will let you borrow if you have used payday loans in the past, you’re likely to find less favourable conditions, such as being able to borrow less than you originally asked for.
Only borrow what you can afford to pay back and try and keep the money you owe to short-term (a few years at most). When a mortgage lender looks at your expenditure, outgoings on loans and credit cards may be deducted from your salary, so having a large loan you’re paying a substantial amount for every month over a long period will mean you will be able to borrow less.
Be reserved when applying for credit
Every time a credit lender searches your credit file, a mark will be put on it saying you’re seeking credit. Although it’s good to shop around for the best rates and conditions on credit, a good broker will be able to suggest where you’re more likely to be accepted for a loan (whether a mortgage, loan, credit card or other type), without searching your credit file.
If you’re having problems spending beyond your means, it’s time to take a look at cutting back. Here are our top tips for saving for a house deposit while studying rather than spending.
Have no-spend days every week
Try and set aside one day a week where you don’t spend anything at all. Leave your purse or wallet at home and avoid borrowing off your mates. It really is achievable if you have food in the cupboard, and will make you seriously consider what you’re wasting money on.
Use cash rather than card
At the beginning of every week, take a set amount of cash out (for example, £50) and hide your cards away. This way you can keep tabs on exactly how much you’re spending and can cut back where needed.
Find a job
You may think you’ll struggle working as well as studying, but even just a few hours a week could make the difference between getting into debt and staying out of it. Student towns are rife for part time jobs, and you could pick up some experience too. If you don’t want to stick to the normal bar or retail jobs, ask around other local firms (perhaps even in the sector you want to work in) and see if they need any help.
Limit your nights out
Although the temptation to go out every night may be huge, it can also drain your funds fast. Limit your nights out to once or twice a week and swap high pub prices for drinking at home instead. Invite your mates round for your own party and buy booze between you to split the cost.
Seek advice if you feel there’s no way out
We’ll be honest. Sometimes, things will get a little out of hand and you may already be in a position where you don’t think you can go on without opting in for credit that can affect your credit file in the long-term. If you get to this point, it’s vital you seek advice, whether from your university, your bank, from the Citizens Advice Bureau or one of the many charities that can help you find a way out. Making a rash decision now can seriously impact your future, so take the time out and discuss your problems with people who understand and can give you independent advice.
What Salary Will I Be On?
No idea what you’ll earn when you finish university? Take a look at our handy table below to see what you’re likely to earn in some of the top graduate jobs in the UK.
|Subject||Professional Salary||Non-professional Salary|
|Accounting & Finance||£23,180||£17,806|
|Aeronautical & Manufacturing Engineering||£25,588||£16,239|
|Agriculture & Forestry||£20,696||£17,071|
|Anatomy & Physiology||£21,988||£15,550|
|Art & Design||£19,669||£15,756|
|Aural & Oral Sciences||£23,658||£15,127|
|Business & Management Studies||£23,952||£17,629|
|Classics & Ancient History||£22,460||£15,514|
|Communication & Media Studies||£19,258||£15,630|
|Drama, Dance & Cinematics||£19,659||£15,429|
|East & South Asian Studies||£23,723||£17,112|
|Electrical & Electronic Engineering||£26,146||£17,253|
|Geography & Environmental Science||£22,001||£18,033|
|History of Art, Architecture & Design||£20,349||£16,175|
|Hospitality, Leisure, Recreation & Tourism||£20,130||£16,966|
|Land & Property Management||£24,505||––|
|Librarianship & Information Management||£24,576||£16,820|
|Middle Eastern & African Studies||£22,412||£17,378|
|Optometry, Ophthalmology & Orthoptics||£16,286||––|
|Pharmacology & Pharmacy||£19,746||£17,105|
|Physics & Astronomy||£25,047||£15,847|
|Russian & East European Languages||£23,973||£18,043|
|Theology & Religious Studies||£21,824||£15,180|
|Town & Country Planning and Landscape Design||£22,775||£17,491|
HESA 2014-15 – Published October 2016