Cards with High balance essential for mortgage application?

CreditCrunchie

Hi all,

I recently applied for an MBNA card. They first accepted me online, then wrote asking for verification of my income. I sent this after speaking to them on the phone and they gave me some interesting info. Basically because I earn quite a bit they were surprised that I didn't already have cards, specifically cards with high limits. The very fact I didn't yet have these was almost enough for a rejection on their part. Anyway after sending in the proof of income they ok'd a limit of £3,500 and said they expect me to be able to raise it after 6 months.

I'm intrigued. Does this also mean that when it comes to a mortgage application, lenders may look at my record and penalise me for not having much credit and those i do not being very high limits? Seems very unfair if so.

grumbler

£3.5K limit isn't very high for a CC.
IMO for a mortgage application it's the total credit used that is most important, not the credit available (total credit limit). A big limit doesn't mean that you have to use it all. Unless it's 0%, you normally want to pay the balance in full every month.

meer53

CreditCrunchie wrote: »

Hi all,

I recently applied for an MBNA card. They first accepted me online, then wrote asking for verification of my income. I sent this after speaking to them on the phone and they gave me some interesting info. Basically because I earn quite a bit they were surprised that I didn't already have cards, specifically cards with high limits. The very fact I didn't yet have these was almost enough for a rejection on their part. Anyway after sending in the proof of income they ok'd a limit of £3,500 and said they expect me to be able to raise it after 6 months.

I'm intrigued. Does this also mean that when it comes to a mortgage application, lenders may look at my record and penalise me for not having much credit and those i do not being very high limits? Seems very unfair if so.

£3500 is a fairly average limit really. The reason for the "near rejection" would have been because you have no credit history for them to base any offer on. Hence the request for proof of income.