First-time Mortgage Credit HELP!!!

Jimmy_P

Hi All,

I wonder if anybody can help?

My girlfriend and I will be applying for a mortgage in 3-4 months time for our first house. We have been preparing for this and checked our credit files on Credit Expert. Everything is correct and up to date on our files and they gave us both a score of 999 out of 1000. The only credit we each have ever had has been mobile phone contracts and overdrafts on our bank accounts. Neither of us has ever had a credit card so…

…does anybody think it wise to apply for a credit card now in an effort to boost our credit history before we apply for our mortgage?

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Will our credit rating be improved much in the eyes of the mortgage providers if I have only had the credit card for 3-4 months?

To improve my chances of being approved for a credit card and for convenience sake I was thinking of going for the 'Nationwide Select Credit Card'. I have banked with Nationwide for the last 5 years, I have several FlexAccounts with them, an e-Savings account and an ISA. Am I more likely to get this card as I am a long term customer?

Neither my girlfriend or I have any serious negatives against us in our credit histories. The only things we have been penalised for in the past are 'unauthorised overdraft fees' and 'paid item fees', when we have spent more than was in our accounts. I'm not even sure if this affects our credit ratings anyway.

Any thoughts will be greatly appreciated.

Thank you.

The_J

Do not get a credit card. It won't make any difference and could negatively affect you as it will be "available credit".

How recently have you been in your unauthorised overdraft?

Jimmy_P

The last time I was charged by Nationwide for being in my unauthorised overdraft was 7 months ago.

So is it better to minimise the amount of 'available credit' I have for the purpose of a mortgage application, despite having not much of a credit history?

I initially thought that having a credit card for 3 months or so and using it well for that time would boost my credit worthiness?

The_J

Yes, try to stay out of the unauthorised overdraft and the overdraft in general.

Having a credit card for that period of time will make virtually no difference. Being on the electoral roll, having all your bank statements go to the right address etc etc. should be plenty.

MagicCats

It's a tricky one I believe. Something like a credit builder card (Capital One, Vanquis) might help. It'll have a low limit and you could use it to buy groceries and pay in full every month.

A mainstream card with a 5k limit is different as that would be knocked off your borrowing power possibly. I think what's critical here is the timing. If it was more than 3-4 months away it'd be a no-brainier.

Maybe one of the forums brokers could advise.

Jimmy_P

Thanks so much for your quick responses! I am massively grateful.

Jimmy_P

Is there a way I can find and contact a forum broker about this?

The_J

I'm sure one of the forum brokers will post. I am actually a FA just haven't got round to doing that signature thing - to be honest on the internet you shouldn't really take someone's word for it.

Speak to a fees free broker like L&C or Mortgage Monitor if you want, then you know you're talking to someone with a professional qualification.

Jimmy_P

Are there any brokers out there who can offer advice?

The_J

Mate I stuck a couple up there, apparently Mortgage Monitor aren't trading anyone (:o) so give L&C a call. You're kind of wasting their time but if you want a fees free broker...

Jimmy_P

Yep, spoke to L&C and they said that having no credit would be a bad thing for mortgage application and could be rejected because of it. They said a low limit credit card could be beneficial.