Maximising credit scores

chickpea87

Hello!

Just a bit of advice really...

I am looking with the other half to buy our first house this year. We should both have good credit scores, will applying for a credit report to check this have any negative impact when we apply for a Mortgage?

Also, do overdraft limits have an impact when applying? I am guessing any unused credit/store cards should definitely be closed prior to application.

Also, we have one loan that is about 5k. This could be paid off with some of the money we have saved for the deposit. Is it best to get this cleared prior to Mortgage app or not? We could easily just keep it and pay it off after we move in as it is really low interest.

Are there any other bits of advice about things that may impact on applications for Mortgages?

Sorry for all of the questions!!!

Thrugelmir

Are you earning a better rate of interest on your savings than your loan? That should be the deciding factor. Clear the loan prior to making a mortgage application.

Every lender will have their internal credit score rating when you apply. So focus on getting your financial affairs sorted out and saving for a deposit,rather than worry about what your credit report says. Unless you have reasons to be concerned.

g_attrill

chickpea87 wrote: »

I am looking with the other half to buy our first house this year. We should both have good credit scores, will applying for a credit report to check this have any negative impact when we apply for a Mortgage?

Definitely not. This page tells you what to do. There are the free online credit report trials by the agencies but if you think you will forget to cancel then just do the £2 statutory check (mentioned on that page), they tell you all you need to know.

chickpea87 wrote: »

Also, do overdraft limits have an impact when applying? I am guessing any unused credit/store cards should definitely be closed prior to application.

Overdraft should be ok as long as it isn't being used, some lenders don't like it if they have been used at all recently (ie. < 3 months). No harm in closing unused cards although I don't think it would have any major benefits.

chickpea87 wrote: »

Also, we have one loan that is about 5k. This could be paid off with some of the money we have saved for the deposit. Is it best to get this cleared prior to Mortgage app or not? We could easily just keep it and pay it off after we move in as it is really low interest.

Outstanding debts have an impact on the affordability calculations. I think this is mostly calculated using the monthly repayments, but some don't lenders like any outstanding loans so it would be safer to pay it off as long as you have enough to get a decent mortgage rate.