I may fail to get a Mortgage as I have never borrowed or had any debt

Matthague

Hi,Put this in the banking thread but as the Credit Checks was for a mortgage thought it may be better here...

Went to see about buying a house and was told by the lady there that they'd have to run a credit check to make sure I had a good credit rating. (despite the fact i'd saved a substantial deposit!).

She asked if we had any debts, or had borrowed before/had credit cards etc..

When I told her that we didnt, managed our money and didnt need to do any of the above she looked worried and said it may be a problem..

Apparently as we've never failed to pay or had to borrow we can't be rated against anything and it may hinder us in the future!

I can see what she meant but surely the people who don't have to borrow/have Credit cards should be rewarded for this, not punished

Mozette

The trouble is, the lender cannot see how you handle credit. They do not know you and so don't know that you manage your money well. They have no past history of you borrowing money and repaying it on time.
I would sugget that you get a credit card (your bank would be your best bet) and use it to buy what you would buy anyway, and pay it off in full each month (easy enough to set up a direct debit to do this). Then you will begin to get a record of handling borrowing well, and a potential lender will be able to see that, and thus feel more inclined to lend to you.

Lokolo

When are you planning on applying for a mortgage? Unless it's something like a year away onwards, there's no point getting a CC because it takes time to build up the history.

And who is this lady? Someone from a bank? Someone in the EA office? Best bet is to go and see an independant mortgage broker

dotdash79

Do you have a contract phone?

that will add to your credit file, likewise some energy compaines report.

I also think virgin media report but I don't think sky do. A smaller BS might beable to help we are going with Leek and they have contacted my landlady to find out how I have been with payments etc.

Get a copy of your credit file from all 3 places, you will be supprised as what is on and what isn't.

Matthague

It was a mortgage broker and we did get the mortgage (although that could be down to the fact we offered 40% deposit!)
PAYG phone, bills paid immediately no direct debits, no sky tv.

Why buy something you can't afford? It kills me having to get a mortgage as i know it's borrowing and goes against me never having anything I can't pay for.

They can see my bank statements if they wished and could see that i've saved the money. Can see why (as they can't trust) but Innocent before guilty and all that.

maninthestreet

Why did post this if you actually got the mortgage?

hazyjo

But you're seeing credit as 'guilty'. It's not necessarily. Credit is something you build up as proof you can pay stuff back. Like it or not, a mortgage is 'borrowing'. It's not about guilt or innocence, it's about risk to the mortgage provider. They are lending a lot of money which they're adding interest to. They have to take some precaution to ensure that money can be paid back. Just because you save and don't overspend does not necessarily mean you'll pay back a 'loan' (ie mortgage).

As above, not actually sure why posted as thought you were asking how to get approved for a mortgage!

Jx

cpdc1030

Matthague wrote: »

It was a mortgage broker and we did get the mortgage (although that could be down to the fact we offered 40% deposit!)
PAYG phone, bills paid immediately no direct debits, no sky tv.

Why buy something you can't afford? It kills me having to get a mortgage as i know it's borrowing and goes against me never having anything I can't pay for.

They can see my bank statements if they wished and could see that i've saved the money. Can see why (as they can't trust) but Innocent before guilty and all that.

Aren't you paying fairly large fees for not paying via direct debit on your gas/electric/phone?

Usually they set the surcharges so high that no one would bother using any other payment method.

As the other posters have said - you've got a lofty goal of being able to live your life without any type of debt or credit. It certainly is possible but also reduces your opportunities tremendously.

jamie11

cpdc1030 wrote: »

As the other posters have said - you've got a lofty goal of being able to live your life without any type of debt or credit. It certainly is possible but also reduces your opportunities tremendously.

Not in my eyes. Well done for not falling for the hype that to be successful you have to borrow.

"Neither a borrower nor a lender be"........good advice then and still is now.

katejo

I take the same attitude towards money as yourself but have had a credit card for many years. I simply pay it off in full each month and ensure that I don't spend more than I can afford to pay off. If you use it in this way, you can benefit from the Consumer Credit protection whenever you spend over £100 and also improve your credit rating (to help with getting a mortgage)

drummer_666

I don't have a credit card and had no credit history, good nor bad but got a mortgage ok.

I don't agree with people living beyond their means, but using credit cards and buying things on 0% interest can be good, even if you can afford them outright as long as you handle your money well.

I will be getting a credit card at some point, it's safer to buy big things using a cc than debit card as it is insured etc.