stoozing and credit utlisation

ehn101 Forumite Posts: 13 Forumite
I'm considering stoozing however I'm concerned about it negatively affecting my credit rating which is average at the moment. I'd ideally like to use the full limit or something like 80 - 90% but understand that the more you borrow the more potential impact it has on your credit rating?
So my question here is what percentage of your credit limit are you currently using to stooze?

I'm saving up for a deposit on a house at the moment and will possibly buy in about 4 years so I obviously don't want this to affect my chance of getting a decent rate on a mortgage. Is it just not the right time in my life to do this sort of thing?

I also curious regarding what kind of credit limit could I expect from a decent salary of £60k? I have an amex cashback credit card used mainly for travel fares which has a credit limit of £5900 can I expect roughly the same sort of limit or can it vary a lot from the provider?


  • MallyGirl
    MallyGirl Forumite, Senior Ambassador Posts: 6,387
    Tenth Anniversary 1,000 Posts Photogenic Name Dropper
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    credit rating is just a number.

    As long as you maintain your accounts well and build up a good history of managing your credit this will stand you in good stead for a future mortgage. You just need to clear everything down several months before you start making mortgage applications.
    I’m a Senior Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
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  • jamesd
    jamesd Forumite Posts: 25,833
    Part of the Furniture 10,000 Posts Name Dropper
    I'm currently using around 80% of my total of credit limits for stoozing. Limits are up to about a fifth of my gross income at the high end down to a couple of thousand at the low end.

    Mortgage applications are scored differently from credit cards and for them it'll be affordability and a record of on time payments that is likely to make the most difference. I got a mortgage from one of the fussiest lenders around with stoozing credit card balances of around 80% of the mortgage amount so it's not actually necessary to clear the cards. What is necessary is to ensure that the affordability calculation works. In my case the mortgage was for not much above a one times income multiple and LTV was 75% so there wasn't much of an issue and the bank said that they would be comfortable with me having another mortgage with a different bank for a different property of about the same amount if that helped with something else that was going on at the time. The card borrowing wasn't used to fund the deposit and I could prove this.

    Credit card borrowing can also save you a lot of money in mortgage interest payments sometimes. Say you're close to one of the LTV thresholds that gets a lower interest rate. You could arrange in advance to do normal spending on 0% cards and save the money you would otherwise have spent. Then you can use that money to increase your equity at purchase time, reducing LTV. You do need to also be aware of the affordability calculations, though, since this is a trade off: worse affordability calculation to get lower LTV. Which is best depends on just where your particular affordability threshold is for a particular lender.
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