credit card vs hp

luke.sibley

I have a question that I need answering. I currently have a hp agreement with snap on tools that I owe £2000 too. I pay £150 a month I can clear or make part payments at anytime. I am trying to get a mortgage but they don't like this hp agreement. so my question is am I better off clearing it onto my credit card that has £0 balace and paying that off instead ? will it affect my credit rating better or worse ? and is having a credit card debt worse than a hp agreement ? advice please

davidwood123

luke.sibley wrote: »

I have a question that I need answering. I currently have a hp agreement with snap on tools that I owe £2000 too. I pay £150 a month I can clear or make part payments at anytime. I am trying to get a mortgage but they don't like this hp agreement. so my question is am I better off clearing it onto my credit card that has £0 balace and paying that off instead ? will it affect my credit rating better or worse ? and is having a credit card debt worse than a hp agreement ? advice please

If you can clear it why don't you just pay it off?

Or do you mean you can only clear it with another form of credit?

Anthorn

luke.sibley wrote: »

I have a question that I need answering. I currently have a hp agreement with snap on tools that I owe £2000 too. I pay £150 a month I can clear or make part payments at anytime. I am trying to get a mortgage but they don't like this hp agreement. so my question is am I better off clearing it onto my credit card that has £0 balace and paying that off instead ? will it affect my credit rating better or worse ? and is having a credit card debt worse than a hp agreement ? advice please

Been quite some time since I've seen hire purchase if that's what you mean by "hp". These days it's a loan which could be a personal loan or a loan secured by the item you're purchasing. Credit is credit and no real difference with regard to CRAs.

I wonder how they knew about the HP agreement. I think you must have declared it.

You will be unlikely to get a balance transfer to clear the HP but you could probably get a Money Transfer to your bank account and then clear the HP from there. But be sure to check on the possibility of a penalty for early settlement.

luke.sibley

hi, no i mean I can clear it by over paying or paying off in full without being charged anything extra. so will also reduce interest. as for paying on a credit card I can make physical payments to my snap on dealer so could literaly pay the full amount on a card as a purchase. it is a hire purchase agreement. I have cleared it many times before in the past. just at this moment in time I owe £2000 on it. so wanted to know if im better off having a CC with 2k balance or a hp with a 2k balance ? as for them knowing they asked for a copy of my credit report. I have a bankruptcy from 4 years ago due to being involved in a RTA costing me my job etc etc etc. I only have the hire purchase agreement and CC to try and re build my credit score. thanks

System

Doesn't make much difference if the balance is on the credit card or with Snap On, you have a certain amount you earn and you have £2000 on finance which is going to affect how much money a lender will lend you and your ability to pass an affordability stress test.

Anthorn

Tarambor wrote: »

Doesn't make much difference if the balance is on the credit card or with Snap On, you have a certain amount you earn and you have £2000 on finance which is going to affect how much money a lender will lend you and your ability to pass an affordability stress test.

MSE Credit Club has its effect doesn't it.

There is probably no such thing as "affordability" when it comes to lenders. They are much more concerned with your credit profile derived from your credit history: How much of your available credit you are using, any black marks such as late payments and missed payments, repeated cash advances, length of accounts, etc., etc.

Yes they ask about your personal and/or family income on the application but the question is whether they actually take any notice of it.

Ben8282

You say 'they' don't like this HP. Who is they? A potential mortgage lender I guess. What exactly don't they like about it? Were they specific as to the reason for disliking it?
So long as we are not talking about payday loans or current account overdrafts, I can't see if it makes any difference if the balance exists as an HP agreement or a credit card balance.
I would imagine that a mortgage lender would be more concerned with a bankruptcy 4 years ago and the thin credit file than they would be about whether a balance exists on an HP agreement or a credit card. 4 years after bankruptcy and you have a credit card with over 2k available credit. Well done.