Improve my credit rating

LisaxXx

Hi,


I'm a newbie :wave:


I need some help please. My husband and I are looking to apply for a mortgage in about 6/7 months. The thing is my husbands credit card score has gone down a lot in the last 5 months and I am not 100% sure why.


He has no defaults, late payments or CCJs. He does have 3 credit cards though and pays more than the minimum balance each month. He has around 25% available credit on all 3 of them and in total owes just under £7000. 2 of them are fairly new cards as we have balance transferred and it seems since we have done this his credit score has hit the floor.


Please can someone let me know what is the quickest way we can repair his rating.


Thanks in advance


Lisa



82.73%

[Deleted User]

Doesn't matter. Your score doesn't mean anything and no one sees it.

Just manage your cards correctly and try to bring the debt down.

LisaxXx

Thanks for your reply.


The thing is we done a mortgage price promise in January and needed a 10% deposit and now we have done another and they want 20% and will lend us around 20k less. I'm guessing these credit cards are affecting that.

[Deleted User]

I doubt it. You haven't increased your borrowing (I assume), only presumably have credit available, which wouldn't have that sort of impact.

More likely to be changes in their lending criteria if your circumstances haven't particularly changed.

Ben8282

Repayment of the balances should improve the overall credit situation

darkidoe

2 of them are fairly new cards as we have balance transferred and it seems since we have done this his credit score has hit the floor.

2 fairly new credit lines will probably hit your credit history a wee bit. Recheck your credit files with the CRAs make sure nothing adverse pops up on your files. Then keep attacking that credit balance to bring it down!

LisaxXx

It must be these two new cards and there is loads of money super market searches when we were trying to find the best cards to transfer the balances, would these searches affect us at all?

Candyapple

Deleted_User wrote: »

I doubt it. You haven't increased your borrowing (I assume), only presumably have credit available, which wouldn't have that sort of impact.

More likely to be changes in their lending criteria if your circumstances haven't particularly changed.

It is possible the credit cards caused the £20k decrease/increased deposit - any "new" line of credit will temporarily affect your credit history for 6 months including the credit searches when you took out the product(s). Also, depending on if the OP's partner closed the original cards the balance was transferred from would have made a difference.

E.g. if there was £7k owed on 1 credit card (card A) with a limit of £10k and then the husband applies for 1 new BT card (card with intention of moving the balance over but finds the limit is too small so has to apply for another card (card C). So there are now 2 new cards with £3k limit each. £2k each has been transferred over from card A to cards B and C so they now sit with a high credit to debt ratio of roughly 75% and also the overall debt has increased by £6k. So although only £7k of it is currently debt, the way the lender will look at it is that there is access to a further £10k so you/your partner could run that up and default - hence the need for the increased £10k deposit and reduction in lending amount. It's risk assessment.

Given that when applying for a mortgage most people are advised to clean up their credit files as early as a year before to allow for any corrections of mistakes and to definitely not apply for any new credit at least for 6 months prior to application, I would definitely say the new credit lines would have had an adverse affect on a new mortgage application.

The only way to limit the damage is to clear the debts and close the cards at least 1 month before application so the cards will show as closed on his credit files.

Just to add as I've seen your post above, no, any soft searches for quotes before applying for a card will not have any effect as lenders can't see those - only hard searches when you actually apply.

YorkshireBoy

LisaxXx wrote: »

It must be these two new cards and there is loads of money super market searches when we were trying to find the best cards to transfer the balances, would these searches affect us at all?

They will be 'soft searches' if you've used eligibility checkers, so won't be seen by other lenders.


The most likely reason is as zx81 says above...an increase in available credit. This will improve once your old lenders report the account closures. You have closed the old accounts down now you've transferred the balances away?