thinking about buying a house do i need a credit card?

ross1985

hey well i saved up 20k now and im thinking i really need to start thinking about buying my first house/flat. i dont live at home i live with my partner in his house but i cant stay like this i know i need my own place even if i rent it out. my mum said i should get a credit card as i have never had one and she said its to help my credit to get a mortgage. i have never had one because my mum always taught me if i cant buy it with cash then i save until i can. so my question is do i need to have a credit card and if so can anyone suggest which one would be best for me, i currently bank with Barclay's and Isa with Halifax if that's any use. thank you for your help.

brenda10

ross1985 wrote: »

hey well i saved up 20k now and im thinking i really need to start thinking about buying my first house/flat. i dont live at home i live with my partner in his house but i cant stay like this i know i need my own place even if i rent it out. my mum said i should get a credit card as i have never had one and she said its to help my credit to get a mortgage. i have never had one because my mum always taught me if i cant buy it with cash then i save until i can. so my question is do i need to have a credit card and if so can anyone suggest which one would be best for me, i currently bank with Barclay's and Isa with Halifax if that's any use. thank you for your help.

Martin recommends several things to do to help make yourself more suitable for acceptance of mortgage.
1. Have and use your credit card, setting up a direct debit to pay it off each month-shows you pay off debts.
2. Make sure all addresses on your bank accounts have the one address.
3. Make sure you are on the electoral roll.
Good Luck with that.
Just check out as I can't think of any more things to do at moment to make you a good bet for getting a mortgage.

ross1985

great thank you, i have just registered for the electoral roll.
but not sure about what credit card to apply for. never wanted a credit card i hate owing money i like to pay it off straight away but i guess i need it.

frisbeej

A credit card is also useful for things like hiring cars, hotels and buying things online.

Annie1960

ross1985 wrote: »

great thank you, i have just registered for the electoral roll.
but not sure about what credit card to apply for. never wanted a credit card i hate owing money i like to pay it off straight away but i guess i need it.

You don't need to build up debt if you have a credit card. Make sure that when you get the credit card you sign up for a direct debit, so that the credit card company will take the money from your bank account every month.

Also, make sure you use the card regularly as if you don't use it for a while they might refuse to renew it.

Which company should you use to get your credit card? I make sure my credit card is with a different bank from my main bank account. This way I have another card if one of them is not working (especially NatWest, which has had a number of problems over the past few years). Have a look at cards that offer the best points or cash back if you are going to pay it off each month.

Kynthia

I don't know if everyone needs a credit card to get a mortgage, but if you don't have a contract mobile and utility bills in your name then you don't have much credit history. You don't have to spend thousands on the card each month, just do your food shop, petrol or something on it and then pay it off each month. It's important to have the direct debit for either the full or minimum balance as paying late one month could adversely affect your mortgage chances. Find one with no annual fee and a low APR on a comparison site.

AndyT678

Kynthia wrote: »

Find one with no annual fee and a low APR on a comparison site.

APR is irrelevant if you're paying it off every month. Better off with some rewards or cash back IMO.

hgotsparkle

We were advised by a Haart mortgage adviser to put things like fuel on a credit card and to have a direct debit set up to pay it off at the end of the month.I have a Clubcard creditcard (as I get my fuel at Tesco which is closest to work), spend £140 a month on fuel and have a direct debit set up for £140 on the day I get paid to pay off the credit card.

jjlandlord

I doubt you'll find a credit card with a high enough credit to allow to pay for a house.

SuzieSue

AndyT678 wrote: »

APR is irrelevant if you're paying it off every month. Better off with some rewards or cash back IMO.

Agree with this as you are going to pay it off at the end of each month.

If you shop at Tesco then their credit card is one of the best as you get extra clubcard points every time you use it in Tesco as well as for anything else, although the points you get for using it outside Tesco are only worth a quarter of those gained in Tesco.

And, as someone said below, ensure you set up a dd to pay the total balance off each month because if you forget to make a payment it will seriously affect your credit rating. Also, when you set up the dd, ensure that it will be set up in time for your first payment as you will need to pay that manually if not.

spidereyes

Personally i dont think having a credit card is absolutely essential but it may help.

I assume that you arnt buying with your partner?

My OH , had never had a credit card, no debts, no bills in his name (not even a phone contract), only thing his credit report shows is searches from comparison sites for insurances, and even then they were only as a linked search from my name.
Only thing really in his favour was that hes been on the electoral roll at all previous addresses - to be honest I think this is more important.

Him having no credit history didnt stop us from getting a mortgage.