Do you need credit cards etc to get a mortgage?

hostie

Hi my partner is a first time buyer. He has no credit cards and has never had a loan. He has a full time permanent job and would like to apply for a mortgage. Will the fact that he hasn't had loans etc give him a poor credit score and stop him getting a mortgage?

If that is the case would he be better to get a credit card or loan now and pay it off for six months and then apply for a mortgage?

We just don't want him to be turned down for the mortgage as that might not be good in the long run.

Any advice appreciated.

Thanks

herbiesjp

Not necessarily

Have you got a copy of your credit files?

It can help to get a higher credit score - buy something on the card and clear it each month

It shouldn't stop you from getting a good mortgage deal though

HTH

dwight-van-man

It can sometimes help if the lender can see how he has performed with other lenders credit, particularly if he's going to need a high LTV - it shows someone else has deemed him a good credit risk and he is showing responsibility with repayments etc. However, deposit counts for a lot as does being on the voters roll, stability of job, time with employer, time in current address etc etc, so its not the end all be all... I would definately make sure he's on the voters roll though - if he's not and he has no credit, he's effectively invisible.....

hostie

Thanks, he is on the electoral register. He has been at his current address for less than six months and he has been in his current permanent employment for about 9 months.
I am still unsure whether we should apply for the mortgage now (we have found a cheap flat we like) or whether we should apply for a loan or credit card for him now and wait six months or so...

dwight-van-man

I guess the trouble is no-one really knows exactly what is factored in to a lenders credit score. If you've seen a flat you like, theres not a lot to lose by trying a AIP with someone - if it does decline, it doesn't show on your credit file as a decline score, simply that Lender X ran a credit check on such and such a date. Its true that multiple searches can cause a credit score to deteriorate, but one or two shouldn't have too much effect. Depends how much you like the flat.....

CLAPTON

a single application for a mortgage won't do his credit file any harm (it will only show the search and not the result in any event), so there is no reason why you shouldn't make a mortgage application now.

hostie

Thanks that is really helpful. I thought that it would show that the mortgage had been declined. If it only shows the search then it will not be too bad. I guess the problem is that if it does get refused, one of the questions any future mortgage lender will ask is 'have you ever been refused a mortgage' and in that case it might be a problem. Having read your replies though I think it sounds like we should give it a go.

hostie

Will it affect him if he has a student account?

herbiesjp

hostie wrote: »

Will it affect him if he has a student account?

Shouldn't make any difference

kenshaz

Try the 30 day free trial from www.experian.co.uk remember to cancel ,can be done on the phone.When you are registered you can ring and ask them your situation ,they have an advice line available to you for the 30 days.
Does your partner have a debit card?

Rick62

I had some friends with this problem, they had moved around and so were not on the electoral register and the wife had never had a loan or credit card.

In their case, she got a credit card and used it a few months and that did the trick. Also her bank would have been willing to lend the money as she had banked with them for ages. Who does your partner bank with?