Affordability vs Credit Rating

ABBF08291

Dear forum,

While affordability and credit rating are both important in their own right, which aspects of credit rating would negatively impact affordability significantly?

Being specific, my credit file has no red flags (0 missed payments, 0 defaults, 0 CCJs) and shows a good product mix. However the file will show that historically credit cards have been used heavily albeit always within limits and always with sizable but varying repayments.

Prior to formally applying for the mortgage I have just cleared all of my unsecured credit card debts however this will not update with the credit agencies for at least a couple of months. I have, however, provided my broker with statement evidence that the credit cards have been paid off so that the latest statement amounts reflect what is on the mortgage application i.e. zero.

Will the historic pattern/use of credit card debt use significantly reduce my affordability? My salary is quite high and having previously been single with no rent or other significant commitments I have always been able to easily both afford and service any unsecured debt balances over the past 3-4 years.

FYI my LTV will be 65-70% max, we have an approx. deposit of 30-35% relative to our price range.

Many thanks

lee111s

With that size deposit you will be fine. As long as there's no missed payments or a huge string of minimum payments then I don't think the CC usage will be seen as an issue.

ABBF08291

lee111s wrote: »

With that size deposit you will be fine. As long as there's no missed payments or a huge string of minimum payments then I don't think the CC usage will be seen as an issue.

Thanks Lee111s.

My credit cards have no missed payments and I have never paid just the minimum.
- On my primary CC (weekly spending) i spend large chunks but also repay large chunks off (usually £1k+) per month.
- On my backup CC (flights, one-offs etc) the minimum payment is around £60 and I almost always pay at least double this, occasionally much more depending on how much i have used it
- my final CC is a Virgin balance transfer CC with 0% interest for 24 months which the minimum payment is £40 and I have repaid a flat £50 each month (but only because it is 0% interest).

Is this pattern of usage/repayment ok, even for the Virgin balance transfer card?

Thx

lee111s

Every lender is different. I'm not a lender, so can't tell you if it's OK or not!