Mortgage and Credit Score Question

MCL72

Hi,

I have a quick question re the impact on my credit score/mortgage eligibility if I open a new credit card account and cancel my current credit card account.

For background, I am planning to buy my first home within the next 6 months (with the help of a mortgage) however, I have realised that the 0% introductory period on my Santander credit card has ended and I am currently also paying the monthly fee to use the card. I do not want to pay the monthly fee to keep the card when I was only using it to build up a reliable credit history and therefore want to cancel it.

I am currently planning on opening a new 0% credit card account and then cancelling my Santander account so that I can continue to use a credit card over the next 6 months and pay it off in full to continue to build a reliable credit history.

My question is – will opening a new credit card account and then closing my current credit account after reduce my credit score and more importantly, my ability in 3-6 months' time to get pre-approved for a mortgage (I know there are plenty of factors involved, but would this be likely to cause a problem whereby it's not worth cancelling my current card until I have a mortgage)?

Thanks.

amnblog

Cannot see it being a dealbreaker.

hurtloam

I did that and it seemed to cause issues with Santander. They seemed to think I had 2 cards with the same amount on them and twice the debt, rather than the one balance. I did it days before a credit check and didn't think anything of it. Would probably be different if I had done it a couple of months prior to applying for a mortgage. I'm new to all this.

Jaglad111

I opened 2 new 0% cards about 3 months before application. No questions were asked but they did state cards to be cleared by completion.

mailmannz

I would hang on to your old card as that will have your payment history attached to it (or a longer payment history attached to it than your new cards).

Are you able to pay off your santander card so there is nothing on it? Or do you need to balance transfer that elsewhere?

Regards

Mailman

MCL72

I would ordinarily keep the Santander account open but don't really see the point in paying the monthly account fee when I am not using it anymore?

There is nothing on my Santander card, save for the monthly fee that is added and paid off each month.

Thrugelmir

Mortgage lenders can see that you are using 0% promotional accounts.

Any change in account history temporarily results in a "reduced" score. As the reason for the change is unknown to the user of the data. Subsequently your notional score will improve.