Help with credit rating for mortgage

rustywallet

I have just spoken to a mortgage advisor from a big bank.
He said as me and my partner had not had credit before it might be a problem, he also said he could check our credit rating, but it could count against us in the future. I didn't realise any of this, we have never got into debt, missed a rent payment or had a credit card.

I'd like to know if any of these would count towards our credit rating:
I have had a catalogue account for about 15 years which I have always paid off, and I had a loan about 12 years ago. My partner had a loan about 12 years ago. But that is it.

If we both got a credit card would that help? How long before it showed this in our favour?

Thanks.

Tixy

I would suggest getting copies of your credit files from the 3 credit reference agencies.

Experian and equifax you can either get the statutory report for £2 each or sign up to a free trial (if you haven't used it before).
For callcredit you can sign up to free access through their noddle website.

Accounts stay on your credit file for 6years from when closed/settled. So if the loans finsihed 12years ago then they will no longer show on file and no longer be visible to a potential lender searching your file.

JimmyTheWig

rustywallet wrote: »

I have just spoken to a mortgage advisor from a big bank.

When you see the word "advisor" in a bank, think "salesman". Note that they can only advise on their own products. What are the chances of that one bank having the best deal for you? If you see a broker they can advise on all bank's products. Independent brokers seem to be best, rather than those within the offices of estate agents.

He said as me and my partner had not had credit before it might be a problem

Correct. You're a better prospect than someone who has had credit in the recent past and failed to pay it back on time. But you're an unknown. Would you expect someone to lend tens, or hundreds, of thousands of pounds to someone who has never borrowed before?

he also said he could check our credit rating, but it could count against us in the future.

Quite possibly correct. It might go on your files as an application search which subsequent companies checking your file would see. They may then think that you've been applying for a lot of credit and score you down because of it.
You can check yourself, however, as Tixy says. Doing this won't be seen by other companies so won't count against you.

I'd like to know if any of these would count towards our credit rating:
I have had a catalogue account for about 15 years which I have always paid off

Yes, this should help. Have you used it in the last 6 years? [Yes, hopefully] Do you wait for the statement to come before paying it off? [Yes, hopefully] Have you ever missed a payment, or made a late payment? [No, hopefully]

and I had a loan about 12 years ago. My partner had a loan about 12 years ago.

Credit files only go back 6 years. Assuming that these old loans were cleared more than 6 years ago then they won't show up and so won't help.

But that is it.

As I said earlier, you're pretty much an unknown entity as far as credit is concerned.

If we both got a credit card would that help?

Yes, this is almost definitely going to help.
Don't go for anything flash (e.g. ignore any cashback or rewards). As long as you pay it off in full each month after the statement comes but before the due date then you won't get charged any interest. So even if the card has a very high interest rate it won't matter.
Just use the card to pay for stuff you would have bought anyway (e.g. supermarket shopping and petrol), put the money that you would have spent to one side then use the money to pay the bill when it comes.
By doing this companies will see that you can be responsible with credit and will be much more likely to lend to you in the future.

How long before it showed this in our favour?

I don't know, to be honest. Six months, maybe?

rustywallet

Thanks you both for taking the time to reply.
Yes, I do pay off the balance from the catalogue when the statement comes, and I have ordered regularly for 15 years.

OK my first thing is to find out about credit rating. I can only see the free credit check on Experian - where you have to sign up. I'd rather just pay the £2, but can't see how to do that?

Tixy

Link here
http://www.experian.co.uk/consumer/statutory-report.html (info at the bottom on ways to order it).

rustywallet

Thanks for the link.

thebritishbloke

In regards to how long it will take to improve your credit worthiness, if it's for a mortgage application you'll probably want to give it a minimum of 6 months, preferably a year from when you're accepted for a credit card. Always pay it on time and in full, setting up a direct debit is best.

rustywallet

thebritishbloke wrote: »

In regards to how long it will take to improve your credit worthiness, if it's for a mortgage application you'll probably want to give it a minimum of 6 months, preferably a year from when you're accepted for a credit card. Always pay it on time and in full, setting up a direct debit is best.

Thanks, I am looking into credit cards now. It's all a bit alien, I am trying to find one with no charges if payment is made in full each month.

I went to the co-op bank, but it looks like there are charges:

Monthly payment 15.9% APR representative/variable
Without taking into account
any introductory rates, how
much interest will you be
charged in the first year?
If you paid the minimum
payment each month £142.43
If you paid £50 each month £116.59

Am I miss-reading this?

Sorry if I sound a bit stupid...

thebritishbloke

Every credit card on the market will not charge you any interest if you pay in full every month, it's pretty standard. Even credit cards through Vanquis which can be up to 89.9% APR, so long as you pay it in full every month you pay no interest.

For ease I'd just get one through your own bank, they know you better than anyone else at this point.

rustywallet

Thanks for info. British Bloke.
89.9% that is mad!!
Yes, I was going to go with a CC from my own bank, my other half really doesn't want one (nor. do I) - I have told him it's for the greater good ;-)

thebritishbloke

rustywallet wrote: »

Thanks for info. British Bloke.
89.9% that is mad!!
Yes, I was going to go with a CC from my own bank, my other half really doesn't want one (nor. do I) - I have told him it's for the greater good ;-)

They're a brilliant tool if used responsibly, and won't cost you anymore than what you would normally spend. I don't understand why some people really dislike the idea, haha.