Will Sub-Prime Credit Cards look bad to a mortgage lender?

Beckwam

I will be settling off my IVA during the next two weeks, and then my plan is to start building my credit rating and saving for the deposit on a house with my husband.

I will first be looking to get a normal current account and then as I understand it the best thing to do is to take out one or two credit cards such as Vanquis or Capital One.

I'm just wondering if a couple of years down the road when I have all these good marks on my credit file and I apply for a mortgage, will the lenders look unfavourably on seeing that I had to apply for 'bad credit' credit cards? Or is it just a neccessary part of credit building?

I just don't want to do anything wrong!

adindas

Beckwam wrote: »

I will be settling off my IVA during the next two weeks, and then my plan is to start building my credit rating and saving for the deposit on a house with my husband.

I will first be looking to get a normal current account and then as I understand it the best thing to do is to take out one or two credit cards such as Vanquis or Capital One.

I'm just wondering if a couple of years down the road when I have all these good marks on my credit file and I apply for a mortgage, will the lenders look unfavorably on seeing that I had to apply for 'bad credit' credit cards? Or is it just a neccessary part of credit building?

I just don't want to do anything wrong!

It is not true

I am currently holding more than ten credit cards with reasonable number of limit, have mortgage, yet I still apply for credit card which is intended for people who want to build up their credit history from the scratch, because the credit card offer me benefit that I could not get enough from other credit cards such as cash back, rewards, etc. I got mortgage while having an easy cash account which is intended for people with poor credit record, thus can not get a proper account.

After getting sub prime credit cards I still apply for a bank account and prime credit card and still got accepted.

The only problem I could see is that if your case was decided by truly novice working for underwriter. You will never know who is going to see your case.

He might think that you have been applying prime credit cards elsewhere but just being approved for sub prime credit cards.

But experience staff will see that everyone will need to build up from the scratch. In your case you will also need to build up from the scratch. But of course it is better if you could get a prime CC especial the one which could offer the benefit and level of service that you need.

Thrugelmir

Beckwam wrote: »

I will first be looking to get a normal current account and then as I understand it the best thing to do is to take out one or two credit cards such as Vanquis or Capital One.

Only apply for what you need. Obtaining credit is not a way of obtaining a better score with lenders. To improve your chances focus on saving that deposit. The larger it is the more options will be available to you.

matttye

Lenders who search the report can't see the name of the credit card lender, only how the account is ran and what your limit and balance is each month. I don't think they can see interest rate either.

izools

That's right, all a lender who does a credit search on you can see is the type of account (but not who it's with) e.g. current account / credit card / loan / communications / utility. They can also see the limit, the balance, and the payment history.

They don't see the APR or the name of the lender. Nor can they see the names of the lenders previous searches belong to, just that you've done them and what type of account they're for.

Gentoo365

In addition they don't care if it is a 'sub prime' credit card company or not. They are more interested in the account conduct. i.e. have you made all the payments in time.