Advice with credit cards and mortgage applications needed please!

purple_button

I've been 'pre-approved' for an 'All in One' credit card by Halifax (I recently moved my current account to them), but I'm not sure if I should take it and what impact it will have on my credit rating.
I have two store cards with around £100 on each, and have been paying the minimum by dd each month, and occasionally paying off a bit more when I have the spare cash. I'm tempted by the credit card as I can transfer the balances from my store card at 0% for 9 months, by which point I'll have paid off the balance, if not sooner.
Also, my partner and I are looking to buy a house. I moved in with him a year ago, we put his place on the market and have been saving for a deposit. We saw a mortgage advisor in Feb who approached lenders for us to arrange an agreement in principle. We were turned down by Nationwide, but Halifax said they'd lend us up to £144k (We're looking to spend £100k tops!!) Around 2 years ago I defaulted on a mobile phone contract (unemployed, problems with JSA as I was a part time student) but paid this off. The mortgage guy reckons this is why we were refused by Nationwide. Since then I've never missed a payment on my store cards.

I'm not sure what is the best way to proceed. Will taking the credit card and closing the store cards have a negative impact on my credit rating and the likelihood of getting a mortgage? Thanks in advance for your help!

go_cat

Applying for a credit card will put another entry on your credit reports.

Have you looked at your credit reports? That would be my first thing to do.

purple_button

go_cat wrote: »

Have you looked at your credit reports? That would be my first thing to do.

No... I don't really know where to start! Will getting a report have an impact on my credit rating?

m0bov

If you can't afford to pay of a couple of store cards then it might not be a good idea to buy a property?

I would pay off ALL your debts, store cards and cancel them all. You appear to be credit hungry which can put alot of lenders off. Get squeeky clean and then maybe in a year try again for the best rates.

BitterAndTwisted

Why are you unable to settle a couple of store-cards with only about a hundred quid on each? Store-cards attract the very highest rates of interest so it makes absolutely no sense in having savings while there's a balance outstanding on the cards.

All mortgage-lenders will be looking at your total indebtedness, and whatever you owe elsewhere will be deducted from any mortgage-offer.

SuzieSue

It doesn't make sense to put money away for a deposit and still have outstanding balances on store cards. Why haven't you just paid off the store cards?

purple_button

I am paying off the store cards, most months I do pay off more than the minimum DD but some months I can't afford to. If I carry on paying the cards off the way I have been doing then they'll both be cleared in 3/4 months anyway.
Each month I have a standing order into a savings account for the deposit, but I can't access the account until I've had a mortgage appt with the bank to close the account. So using the savings to pay off the cards isn't an option.

SuzieSue

purple_button wrote: »

I am paying off the store cards, most months I do pay off more than the minimum DD but some months I can't afford to. If I carry on paying the cards off the way I have been doing then they'll both be cleared in 3/4 months anyway.
Each month I have a standing order into a savings account for the deposit, but I can't access the account until I've had a mortgage appt with the bank to close the account. So using the savings to pay off the cards isn't an option.

So you are saying that the Halifax are making you save a cetain amount each month and won't let you reduce the amount you save and won't let you access your own money?

brillopadsaplenty

Definitely start by looking at your credit report, I reckon. Experian (experian.co.uk) will give you a 30 day free trial (I just signed up for this myself recently) and you should be able to see your score instantly when you register.

This won't affect your credit rating/score, but lenders (banks etc) who want to check your score before offering you credit will be able to see that you've accessed it, I think. But that shouldn't matter. It's a sensible thing to do, because not only does it give you the full picture, if you've got a negative score, it can help you understand why and what you can do to improve it.

I was worried about signing up, but I am applying for a mortgage and didn't want to go in blind...as it turns out I had a good rating! My huz has had some credit card problems in the past, but his score is also excellent.

Good luck!

purple_button

SuzieSue wrote: »

So you are saying that the Halifax are making you save a cetain amount each month and won't let you reduce the amount you save and won't let you access your own money?

No - the savings account I have is a first home buyer one with Santander, which gives 5% interest providing you pay in a set amount each month and have a mortgage appt with them when you close the account. I can access the money, but it would mean closing the account and I wouldn't be able to get a better rate with another account so I'd rather leave it where it is.

SuzieSue

purple_button wrote: »

No - the savings account I have is a first home buyer one with Santander, which gives 5% interest providing you pay in a set amount each month and have a mortgage appt with them when you close the account. I can access the money, but it would mean closing the account and I wouldn't be able to get a better rate with another account so I'd rather leave it where it is.

Oh ok. I would be wary about taking out another credit card while looking to take out a mortgage.

There is no problem at all checking your credit report, and once you have done that you will have a better idea about whether you should take out another card.