If I have a good mortgage history does the rest matter?

Legacy_user

The only credit I'm ever likely to take out is another mortgage or phone contract or current acount, and I have a proven history with those but no history with credit cards or loans

If I never need a credit card or loan does it really matter from a mortgage point of view if those aren't on my file? Previous mortgages have always been referrals that passed in underwriting.

Its just that having a credit card means remembering another pin number, it means remembering to make payments every month, it seems like more hastle and the cashback offers don't clearly beat the Halifax debit card one, which has less frequent but bigger (5-10%) offers

National_Debtline

Hi Matthew,


If you have a credit history with things such as your mortgage, phone contract and current account and they are all up to date then that is positive. You don't need a credit card, it simply creates more information and more history.


In terms of whether or not this will make a difference will depend on who you have applied to for credit. They will apply their own formula to see if you qualify for the credit, if you have never had any problems in the past, I can't see any reason why you would in the future if nothing has changed.


Laura
@natdebtline

System

Thank you Laura, its helped me make up my mind, I won't take one out, and I think statements make up for the information.
In fact a credit card would harm my affordability, which is tight enough.

I would discourage others from feeling like they need a credit card, just that my first mortgage was before they tightened up the rules, and it was 25%, so someone going for 5% nowadays probably needs a bit more. In my case back in 2011 all I had for credit history was a few months of overdraft from a previous year

MallyGirl

It may be different now, but when my BF (now husband) and I went for our first joint mortgage he got approval straight away but I had to be referred to the underwriters. I got approved by them after a fairly short wait but it was extra stress I didn't need at the time. I had very little history of paying back borrowings because I hadn't borrowed anything, whereas he had come out of uni with debt/overdraft etc which he had paid off by the time we met.
Just another perspective.

System

Waiting was stressful I must admit, on the whole chain, I suppose it depends on whether you can spare the affordability

As a side note, although I was approved for a Santander mortgage I was rejected for the 123 account! (And this was a couple of years into making overpayments) - I imagine it's just because it would've been unprofitable for Santander, and I wasn't on the electerol roll at the time

Likewise when I switched current accounts I now have £1100 smaller overdraft allowance, but banks have been reducing allowances across the board in hopes of you incurring extra fees (I suspect)

takman

I personally would always have a credit card for the Section 75 protection that it offers for purchases over £100. Plus for me it makes it easier to manage my money and make larger purchases. If I want to make a large purchase I can do it immediately instead of having to transfer the money from various current accounts or cash in investments first.
I also use it occasionally for business trips where my company haven't prepaid for accommodation already. This means that I can claim back the expenses and pay it off without any money leaving my account.
Plus if your on a tight budget they allow you to have an interest free "payday loan" because you can purchase something needed immediately and then pay it off on payday.
Also if you don't have multiple current accounts and your banks systems goes down a credit card will mean you arnt left without money until it is fixed.

So its definitely worth considering having one.

System

I suppose there are those advantages, I very rarely spend that much in one go but the credit aspect of it means if you use it cleverly you can keep it invested that little bit longer, and whether that's enough to be worth the time in managing it depends on the individuals borrowing limit and what their times worth.

I wouldn't say its less hastle than transferring between current accounts since you'd have to transfer to the credit card each month anyway, and I think everyone should have multiple current accounts to reap all those rewards,

I.e. Have

- Halifax reward for the £5 a month, but Never go overdrawn on it
+ Natwest rewards for 3% cashback if youre the billpayer
+ TSB for 5% on £2000 and 5% cashback on some contactless spend for a while
+ nationwide flexdirect for 5% on £2500 for 1 year, and access to their 5% regular savers
+ salamander 123 for any other cash, if your mortgage is less than 3%
+ others you may be able to think of

I just use standing orders to "pay in" the required amounts. I don't have enough cash to run all those yet