FTB Credit report / score

livalicious

Hi there,

My partner and I are hoping to be first time buyers soon, if we find a house that is ((groan)) and Ive been reading alot on this forum and elsewhere that people are not being accepted for mortgages, sometimes for no apparent reason. Im just worried this might happen to us, because I have no "credit history"! That is to say I have never bought anything on credit, and dont own a credit card, so I might score poorly with some lenders.

We have a 15% deposit saved, no adverse credit, late payments, etc. We only want a mortgage 3.5 times our income. We both checked our credit reports and all looks fine, we on the electoral roll. Except that I read somewhere today that banks may be turning down mortgages because there is no credit history to check how good the applicant (s) might be at paying back borrowed money.

I always thought I was being prudent by not living outside my means, turns out it might go against me now. My question is, would it be a good idea to apply for a credit card now, and maybe just use it to buy petrol or something and pay it off soon as? Will it make much difference, should I not bother?? Any advice would be appreciated!

g_attrill

It might be a little late, but it won't do any harm to have a CC. One thing though - when applying set up a Direct Debit to pay off the whole amount (or the minimum, at least), don't rely on paying the bill when it arrives.

livalicious

Is there any reason why I should do it that way? Sorry, i dont have the first clue about credit cards, they scare me! Also, do you have any suggestions of what would be the best credit card to get for my situation?

I do have 3 bank accounts (a current and savings with one bank, and an ISA with another bank, the latter I opened a few months ago) and a mobile on contract, would that count as credit and help my score?

ray123

Have a look at this article:

http://www.guardian.co.uk/money/2010/mar/04/improve-chances-getting-mortgage

Extract below:
'Mark Horne, director of Asset-Cap London, says: "It is a myth to believe that 'I've never owed anyone anything' is a good thing, as it shows a lack of experience in managing debt and fulfilling the terms of a credit commitment." He suggests applying for some 0% credit cards, spending £50 on each of them before paying them off by direct debit.'


Your best bet would be to apply for a credit card with your current bank and as stated previously, set up a direct debit to pay off the FULL AMOUNT each month.