Electoral Roll registration versus mortgage application

Few people know that by signing up to the Electoral Roll you can increase your credit score, which will consequently allow you to pay a lower interest rate on your mortgage. At first glance, these two things may seem completely unrelated, but the reality is different than you might think. Let’s find out why banks reward Electoral Roll registrants and how much you can gain by doing so.

What is the Electoral Roll?

The Electoral Roll (officially the Electoral Register) is the official list of people eligible to vote in UK elections. It contains details such as addresses and names of people who have registered to vote. It is maintained by local councils (Local Councils) in England, Scotland and Wales, and by the Electoral Office for Northern Ireland if we are talking about Northern Ireland.

The register is updated annually, as part of the annual review of the Electoral Roll (Annual Canvass). During the Electoral Roll update process,Electoral Registration Officers (ERO’s) may contact households to ask them to confirm that their details are up to date. As a UK resident, you can also submit changes yourself - in which case the Electoral Register will be updated more quickly, as early as the monthly review. Communication with the office is mainly by post, but some matters can also be dealt with via the government website.

It is also worth knowing that the Electoral Roll is also used by law enforcement agencies and courts, to obtain reliable data on citizens’ addresses and identities. It is therefore a very important database, which is not insignificant in the context of mortgages.

Who can register to vote in the UK?

**In order to register to vote in the UK Electoral Roll, you must have resident status and be aged 16 or over **(or 18 for general elections). Simply signing up to the Electoral Roll is already possible once these two conditions are met, but voting rights will vary depending on whether a person has citizenship. UK residents without UK citizenship will only be able to take part in local and council elections. Only UK citizens can take part in parliamentary elections and national referendums. However, this division does not affect your credit position - all that matters to the bank is your presence on the electoral register.

Registration on the Electoral Roll is compulsory for all who qualify. If an eligible person fails to undertake registration or ignores the call to register, they face a penalty of up to £1,000. A penalty may also be payable by a person who fails to confirm or update their details at Annual Canvass. In practice, these obligations are not particularly enforced and penalties are rarely imposed, but it is worth taking a brief moment of your time to register to completely avoid the risk of getting into trouble for this reason.

Does registering for the Electoral Roll raise your credit score in the UK?

Definitely yes! It turns out that the Electoral Roll is also finding its way into financial institutions. When assessing creditworthiness and estimating risk, bank staff check whether the customer is registered on the Electoral Roll.

As we have already mentioned, the Electoral Roll is a tool used to verify identity by some state bodies. Presence on the Electoral Roll is also evidence of permanent residence and a long-term link to one address. It can also be argued that a person on the Electoral Register is more connected to the local community and therefore will not want to suddenly disappear and avoid paying their obligations, but in our opinion this is just a theory.

Whatever your reasons, signing up to the Electoral Roll is one of the best things you can do for your finances. You will almost certainly see your credit score rise. Banks like to lend money to people who behave sensibly and predictably, so you can expect to most likely get better credit offers and therefore pay a lower instalment for the same house.

In our opinion, registering for the Electoral Roll is one of the most effective ways to raise your credit score. Take care of this before you start building up a credit card repayment history.

By how much will my credit score increase if I register for the Electoral Roll?

It is not possible to give an exact value by which your credit score will increase after registering for the Electoral Roll. In each case, the credit score increment can be different and it depends on the other criteria for assessing your situation.

In our experience, signing up for the Electoral Roll can raise your credit score by 10 as well as up to 60 points. However, a general rule of thumb is that those with a lower credit score will gain more than those whose financial situation is already very good. The underwriting algorithms also place a premium on borrowers who have lived at the same address for a long time. The longer you have lived in your current flat or house, the more you stand to gain from signing up to the Electoral Roll.

We probably don’t need to add that when applying for a mortgage you should check that your Electoral Register details are correct. If you are planning to move, be sure to let the office know quickly.

I can’t register for the Electoral Roll - what to do?

If you do not meet the conditions to register for the Rlectoral Roll or are otherwise unable to register, it is worth considering other methods to improve your credit score. We list some of these below.

Credit card and improving credit score through hire purchase

Using your credit card responsibly and correctly can have a positive impact on your credit score. For this to happen, you need to use the card regularly and pay off the full amount on time each month. Doing so can build a positive credit history, which directly affects your credit rating and credit score.

On the other hand, taking out consumer credit on a regular basis, and this is how borrowing money using a credit card is to be understood, can lead you into a debt spiral. If you exceed the interest-free period, you will have to pay a very high interest rate.

You also need to be aware that borrowing money regularly may suggest that you tend to get into debt and live on credit. Your mortgage underwriter may have a lot of doubts if you use up your card limit every month.

Checking your credit report for errors

Checking your credit report regularly is key - you may find that your credit score is low simply because someone made a mistake about the payment status of one of your obligations. The most common errors we find on our clients’ reports are:

• Incorrect personal information - it can happen that a liability that does not belong to you is assigned to your credit report. This is not a very common occurrence, but it cannot be ruled out. It can also happen that certain events of a positive nature are not attributed to your name - if the banks cannot see that you have been paying your phone subscription regularly for several years, you are only losing out;

• Incorrect liability status - your credit report may show active loans, even if you have long since paid them off. There may also be indications that you have forgotten to pay an instalment or have done so late. These kinds of mistakes are obviously very bad for your credit score - lenders don’t like people who don’t pay their money back on time;

• Unauthorised credit enquiries - virtually all loan and credit enquiries will appear on your credit report. Even if these are so-called soft credit checks, so they won’t lower your credit score, the analysts working for the bank may take this as a warning signal. So if you see someone impersonating you and trying to take out a loan on your details, report it as soon as possible.

To find out how to check your credit report, take a look at our guide. You can check your credit report on the Checkmyfile website and, if necessary, we will also help you at your first meeting with a credit counsellor - this is when we deal with our clients’ credit scores.

Close out your commitments

To improve your credit score, it is a good idea to close down your active financial commitments. If you are using a credit card and are unable to pay your obligations always on time, it is a better idea to get rid of it completely. This also applies to other loans that you do not repay on time. The more of them there are, the worse your credit score will be.

Of course, having a variety of financial obligations does not necessarily mean a lower credit score, but the key is to have a variety of them, a low debt-to-income ratio and to pay your obligations on time. In other cases, it is a good idea to limit your commitments as much as possible - if only to avoid forgetting a payment.

Ensure timely payment of electricity, water and gas bills

Energy bill repayments also affect your credit score. It is therefore important to remember to pay them on time so that they do not negatively affect your creditworthiness.

Other proof of residence

If you cannot confirm your residence through the Electoral Roll when applying for a mortgage, you can do so with other documents such as:

• Utility bills (except mobile phone);

• Bank statement including name and address;

• Lease agreement or mortgage document;

• Letter from the authority or tax document.

The Electoral Register statement should be regarded as additional evidence - the bank simply has a clearer picture of your financial situation.