No Credit For 6 Years

wrkactjob

Thinking of a mortgage....

My credit record over the last 6 years will show that no credit has been applied for or granted.

My bank does not report to the CRA's...Giffgaff does not report to the CRA's.

I am registered on the electoral role.

So I have shown that for the last 6 years I have been able to run my financial affairs without resorting to debt.

But apparently this isn't a good thing and I now need to get myself into debt and show I can pay it off to increase the chance of getting a mortgage?

Can nobody see the crazy logic of this situation?

Surely having no debt against you for 6 years is the ideal?...are there no financial institutions that will welcome a clean slate?

1funkymunky

I'm in exact same position myself although its only been 5 years I've had to apply for a credit card (Aquacard) which I believe goes on my credit file search I then have to show that I am managing my credit card call it bizarre if you ask me.

Tixy

Having a credit history isn't an indication of having had debts or having not been able to manae your financial situation.

And in general it does make sense that a potential lender would prefer to be able to see that a person has kept up with previous credit agreements.

However, the criteria for a mortgage and the way they are 'credit scored' is not the same as for consumer credit so you may be able to get a mortgage without credit history.
Your best options may be your own bank, or whichever bank you have been building up your deposit savings with.

CherlokHomes

Would you lend someone 150k knowing nothing about how this person has handled paying back what they've borrowed?

The short answer is NO so why should the bank trust you when you can't prove that when you borrowed before you paid it back on time.

shortcrust

It might be counterintuitive but it isn't illogical. Your profile is exactly the same as someone who had a stack of defaults drop off their file yesterday. How are lenders supposed to tell the difference?

Just get some credit and pay it off every month. There are no costs and lots of benefits. If you want a mortgage you're clearly not opposed to borrowing in principle.

Tiddlywinks

wrkactjob wrote: »

So I have shown that for the last 6 years I have been able to run my financial affairs without resorting to debt.

But apparently this isn't a good thing and I now need to get myself into debt and show I can pay it off to increase the chance of getting a mortgage?

You don't need to get yourself into debt... you are just being overly dramatic now aren't you?

All you have to do is get a credit facility - such as a credit card - and use it.

If you get a credit card, use it to buy all the things you would get anyway (such as groceries, fuel, tickets etc) and then pay the bill in full each month, you will be showing that you can handle credit... without getting into debt.

Tixy

Having read some of your previous posts - now that the negative items have dropped off your credit reports and they now appear clean & empty then it certainly makes sense to now start building up a credit profile.

You don't need to get in to debt again and don't obviously overcommit yourself to a point where you are unable to repay your debts even if your circumstances change.

Just using a credit card for £50 of purchases a month will be a good starting point.

Thrugelmir

wrkactjob wrote: »

But apparently this isn't a good thing and I now need to get myself into debt and show I can pay it off to increase the chance of getting a mortgage?

Save a deposit through a lender. Both Nationwide and Halifax offer FTB savings schemes. Regular saving clearly demonstrates an ability to manage money. This is how to earn brownie points.

sirwiggum

Mortgage lenders also take into account salary, and my other half's asked for her previous bank statements.

I still don't understand why it can be straightforward to get car finance - secured against the car, but not a mortgage - secured against a property? Are they scared of further negative equity?

As others said, a credit card, the likes of Luma are easy to get (I got one with a 5 year default still on file) which at least shows you can handle debt without getting into trouble.

Tixy

sirwiggum wrote: »

I still don't understand why it can be straightforward to get car finance - secured against the car, but not a mortgage - secured against a property? Are they scared of further negative equity?

I guess its because its a much larger and longer financial commitment, much harder and more expensive to repossess than a car and also as you say could result in significant negative equity.