Credit rating

maver1nk

Hello Dear Forum Members,

I amhoping to buy a house in 3 to 4 years, having saved up enough money for a deposit. Meanwhile, I am worried about my wife's credit rating. We recently applied for 2 credit cards and were rejected both times, but without receiving a reason.

One reason I think we were refused is that she was not on the Electoral register and possibly that she has only lived in the UK for 4 years and is working ina temporary job only.

In short, can someone, preferably an expert, let me know how best we can go about getting her a credit rating. I've already registered her onto the local Electoral Register, upon which she'll be appearing this month. Also, tried using Equifax but they charged to use their service...

Looking forward to any responses!

maver1nk

kingstreet

Get yourselves on the electoral roll.

Obtain statutory credit files (£2 each) from all three Credit Reference Agencies (CRAs) to ensure nothing incorrect is registered.

Equifax

https://www.econsumer.equifax.co.uk/consumer/uk/gb_consumerletter.ehtml

Experian

https://secure.wiseconsumer.uk.experian.com/wiseconsumer/secure_index.html?data=00

CallCredit

https://www.callcredit.co.uk/stat-report-online/index.php?action=register_display&tpl=regPurchase


After a few months of being on the electoral roll, she should apply to one of the easier card providers, like Capital One, and use this to build up her credit record. This means spending on the card, awaiting the monthly statement, then paying the balance in full on time so she pays no interest.

Another year after that, check credit files again to ensure all payments are showing correctly and do this annually thereafter.

maver1nk

Hi again,

Assuming my wife gets a credit card in, say, 3 months, would we be able to take her salary into consideration for a joint mortgage in about 3 years' time?

We'd basically buy something on her credit card once a month and pay it off before time for the next three years to build up a rating. We don't need to borrow money (God bless) at the moment as have good but small savings so far.

maver1nk

kingstreet

Having well conducted existing credit helps with any application for future credit, such as a mortgage. Being able to take her income into account in three years time will depend on her job terms, rather than her credit worthiness.

It's probably easier to think of things this way;-

- good credit means being able to be included on the mortgage
- good income and employment history means having the income taken into account and getting higher borrowing power.

A deposit is probably one of the more fundamental issues facing you. You'll need at least 10% of the purchase price now and I don't expect that will be significantly different in the future.

MRG

kingstreet wrote: »

Having well conducted existing credit helps with any application for future credit, such as a mortgage. Being able to take her income into account in three years time will depend on her job terms, rather than her credit worthiness.

It's probably easier to think of things this way;-

- good credit means being able to be included on the mortgage
- good income and employment history means having the income taken into account and getting higher borrowing power.

A deposit is probably one of the more fundamental issues facing you. You'll need at least 10% of the purchase price now and I don't expect that will be significantly different in the future.

Can't say fairer than that.

You can sign up to Equifax or Experian and such usually for a free 30 day trial. Just make sure you cancel it at the end of your free period if you no longer require it. Then you can re-assess when you get closer to the time of taking out a mortgage.

maver1nk

Hi all,

Can I just clarify though that a credit rating is not important when considering a mortgage and that it the deposit and job security which is the issue?

cottonhead

Get on the elecrtoral role and make sure you have a landline telephone number. Does your wife have her own bank account ? If she runs it well and has payments in and out that can help I think - seemed to help me anyway and after a few months I was sucessful in applying for an overdraft. Make sure everything is paid on time etc. Some of it is down to time I think. My husband didnt have a good credit rating because he had never had any credit and hadnt been in the country long but once he had a basic account he could upgrade after managing it well.... then get an overdraft ...then a credit card....- start by managing what you have well and be patient and it should work out.

kingstreet

maver1nk wrote: »

Hi all,

Can I just clarify though that a credit rating is not important when considering a mortgage and that it the deposit and job security which is the issue?

No. That isn't what I said. In response to your question about your wife's income being taken into account, I tried to explain that being creditworthy means being able to be on the mortgage AND having the income included in borrowing calculations will depend on the income and employment history.

Therefore both are important but having no income is not fatal to a mortgage application if the other borrower's income is sufficient to cover the whole mortgage.

To try to put this clearly;-

- creditworthy means getting a mortgage
- deposit in excess of minimum means a better mortgage rate
- provable income/employment history means a bigger mortgage.