Credit card app soon before loan - wise?

paperbackreader

Hi there,

I'm a home renter with one current account and no credit cards. The only loan i have is £150 left to pay on a iphone with a Barclays finance deal.

I'm looking to get a loan for a big purchase of around £3000 within the next couple of months. This will either be a loan or finance arranged through the company I buy the item from (not sure which yet).

I've never had a loan before and from the reading i've done, my chances of application success would be bolstered with a track record of having and managing a credit card effectively.

My question is, if I'm likely to apply for a loan within the next month or two for this big purchase, is getting a credit card this soon before it wise? Maybe it would be too close to the loan application to demonstrate a history of using the credit card and managing it well to be beneficial?

After joining the Credit Club today to look into my current credit situation, I've a solid Experian score (977) but a low 'credit hit rate' of 40%.

I have medium 'health' for the following points:
- Residential status (rent, dont have a mortgage)
- Account stability (not sure why, changing phone contracts and utilities regularly i presume)
- Lastly and maybe most importantly Credit utilisation. No credit card.

So, in a nutshell, is applying for a credit card immediately when i might then be trying to get a loan in a month or two risky or beneficial?

Thanks folks, any input is very much appreciated!

DCFC79

paperbackreader wrote: »

Hi there,

I'm a home renter with one current account and no credit cards. The only loan i have is £150 left to pay on a iphone with a Barclays finance deal.

I'm looking to get a loan for a big purchase of around £3000 within the next couple of months. This will either be a loan or finance arranged through the company I buy the item from (not sure which yet).

I've never had a loan before and from the reading i've done, my chances of application success would be bolstered with a track record of having and managing a credit card effectively.

My question is, if I'm likely to apply for a loan within the next month or two for this big purchase, is getting a credit card this soon before it wise? Maybe it would be too close to the loan application to demonstrate a history of using the credit card and managing it well to be beneficial?

After joining the Credit Club today to look into my current credit situation, I've a solid Experian score (977) but a low 'credit hit rate' of 40%.

I have medium 'health' for the following points:
- Residential status (rent, dont have a mortgage)
- Account stability (not sure why, changing phone contracts and utilities regularly i presume)
- Lastly and maybe most importantly Credit utilisation. No credit card.

So, in a nutshell, is applying for a credit card immediately when i might then be trying to get a loan in a month or two risky or beneficial?

Thanks folks, any input is very much appreciated!

For a small amount a credit card would be better than a loan, loans for that amount could be expensive compared to a credit card.

Ignore your credit score, all 3 agencies rate you differently and lenders don't see it, they see the history.
Id get a credit card and use it sensibly.
Could you use part savings part credit card ?


Why next month or 2 for the purchase, could it be postponed for another month ?

[Deleted User]

Why take a loan? Can you not save up for it? Sell some items to go towards it?

Ignore your fictitious score and rating.

What!!!8217;s your incomings and outgoings?

paperbackreader

Hi folks, thanks for the replies.

My income is around £26k. No savings and I generally spend what I make on living expenses.

I guess the smart move would be to just hold off and save up

DCFC79

paperbackreader wrote: »

Hi folks, thanks for the replies.

My income is around £26k. No savings and I generally spend what I make on living expenses.

I guess the smart move would be to just hold off and save up

Really should start saving, what happens if you need to get something replaced eg a car service uncovered some work needs doing ?

Anthorn

paperbackreader wrote: »

Hi there,

I'm a home renter with one current account and no credit cards. The only loan i have is £150 left to pay on a iphone with a Barclays finance deal.

I'm looking to get a loan for a big purchase of around £3000 within the next couple of months. This will either be a loan or finance arranged through the company I buy the item from (not sure which yet).

I've never had a loan before and from the reading i've done, my chances of application success would be bolstered with a track record of having and managing a credit card effectively.

My question is, if I'm likely to apply for a loan within the next month or two for this big purchase, is getting a credit card this soon before it wise? Maybe it would be too close to the loan application to demonstrate a history of using the credit card and managing it well to be beneficial?

After joining the Credit Club today to look into my current credit situation, I've a solid Experian score (977) but a low 'credit hit rate' of 40%.

I have medium 'health' for the following points:
- Residential status (rent, dont have a mortgage)
- Account stability (not sure why, changing phone contracts and utilities regularly i presume)
- Lastly and maybe most importantly Credit utilisation. No credit card.

So, in a nutshell, is applying for a credit card immediately when i might then be trying to get a loan in a month or two risky or beneficial?

Thanks folks, any input is very much appreciated!

Depends on the lender: Applying for two forms of credit in quick succession could be seen as suspicious. However usually the number of applications over the last year is considered. The only way that a lender will know that you have recently applied for credit if you don't volunteer that information is from a credit search on your credit history: It could be that the two lenders will report to and search different CRAs so they will not see it.

System

paperbackreader wrote: »

Hi folks, thanks for the replies.

My income is around £26k. No savings and I generally spend what I make on living expenses.

I would post on the Debt Free Wannabe board and see what advice they can offer to get your spending down. Chances are you're paying more than you should be in at least one area.

sparkey1

Can the large purchase be done with a credit card, that has a 0% on purchases deal.

https://www.moneysavingexpert.com/credit-cards/best-0-credit-cards/

paperbackreader

HI everyone, thanks for the replies here.

Tarambor the debt free newbies thread is a good resource for me. My car insurance is certainly one area where i could be saving some cash.

Sparkey1, the 0% card is something i've looked into. The only issue with that is I have no idea what my limit I would be offered on a card, I'm assuming it would be fairly small (maybe £400 or something?). So it wouldn't be enough to cover the purchase.

Thanks again for all the replies.