Trashing your credit worthiness

TheDebtinator

Just a thought on this, wrt applying for several forms of credit in a short period of time.

Say you apply for a mortgage, loan and credit card in a short period of time, and get approved for all 3, this will trash your credit ability I am sure. Should you then pay these each month for 3 months, would your ability of obtain credit improve significantly?

Don't worry, I am not planning on doing it, it is just something I want to know

Thanks.

[Deleted User]

Your question suggests there's a single answer. There's not.

Repeated credit applications will worry some lenders that you are desperate for credit.

Good repayment history will reassure most lenders. However, 3 months is not much to go on.

TheDebtinator

Thanks. I realise there are many factors involved. It is an interesting concept trashing your own credit ability on purpose for the short term, knowing that you will not need credit again for some time, if that makes sense.

Candyapple

TheDebtinator wrote: »

Thanks. I realise there are many factors involved. It is an interesting concept trashing your own credit ability on purpose for the short term, knowing that you will not need credit again for some time, if that makes sense.

Isn't that the whole point of having a good credit history in the first place? To be able to get credit when you need it?

If you've taken out a mortgage, loan and credit card then I would imagine that your fictional score on all the 3 CRAs would drop dramatically, but this is meaningless anyway and would mainly be because a) you've had 3 hard searches in a short space of time and b) 3 new accounts have been opened with no history of repayments on them.

I would imagine 6 months is more of an indicative factor than 3 months as to your 'scores' gradually recovering once they see your repayment history and then the hard searches would be making less of an impact as well.

TheDebtinator

Well yes, but when the opportunity is there to get 3 lots of credit within x amount of time, and then knowing you wont need to get credit for another 12 - 24 months, then so long as you maintain your repayments, you should be OK by then.

I am not for one second advocating such a practice, it is just interesting to me.

Nebulous2

I sort of did this last year. Late 2016 I borrowed over £30k to stooze. I went from credit cards paid in full to carrying substantial balances.

I'm unlikely to need credit soon, so it didn't matter, but my scores didn't drop as much as I expected. Noddle went from 5 out of 5 to 4 out of 5 for instance, which is where it has stayed.

It hasn't recovered as much as I expected either. I applied for a Tesco 30 month 0% purchase card recently, the first application in 7 months. They offered £1800 for 18 months, which I declined. As I have £3000 in a Tesco account I thought that was a very modest offer. They have a reputation for being generous, so it does look as if the impact of my spree last year will be with me for a while.