Credit Check Advice

DebsDD

I am hoping someone can help me with what mortgage lenders put more importance on when they do a credit check. I currently own a property with a friend who is (hopefully) going to buy me out, I am then going to buy a property with my partner, with nothing to sell so we will need a new mortgage.

My questions are: he has £8,000 in savings and £8,000 debt on his credit card, is it better to leave this as it is (it is 0% credit card) or clear one with the other and then have no debt or savings?

My other question is that I usually go right up to my limit on my overdraft as I recently changed bank accounts to a 0% interest on overdrafts for a year to help me clear my credit card debt (£3,000). Will this go against me or should we use £1500 from our deposit (parents are lending us the deposit) to clear the overdraft? We have not defaulted on the current mortgage payments, credit card payments etc.

thanks for any advice.

Debs

happybroker

having some active credit on your file which is being well managed will help your score no end. If the £8k is to be repaid from saving prior to the mortgage completing then you will confirm this in the mortgage application anyway.

Using your overdraft doesn't look good if they want to see your bank statements (not as bad as going over the limit though!) but they might not ask for them, if they do provide a covering letter confirming that you have been clearing credit cards which has resulted in you use of the interest free overdraft. You could always use some of the £8k to get out of the overdraft I suppose.