Credir card paid in full each month affecting mortgage application

Robsia2

I have had my initial mortgage offer (Skipton) and it is £14K less than I need due to "undisclosed credit" apparently. I have checked my credit report and the only things on there are my current mortgage with my stbx-H (which will be gone as we're doing transfer of equity) and my credit card which I use for day to day expenditure (groceries etc) and is paid off in full every month, both of which I disclosed. My credit score is perfect.

My loan is paid off and I haven't used my overdraft in 6 years.

With the credit card, there is always an outstanding balance as, even though it is paid in full every month and has been for 10 years, it's paid a few weeks behind so expenditure from between 8 July and 7 August is paid on 3 September, and in the meantime there has been further expenditure.

My broker (L&C) seems to think it will be OK but I am SO worried this will be a problem. It's been a week now since I challenged what they said and still waiting to hear.

I always thought CC balances paid in full didn't count? Was I wrong?

Please someone set my mind at ease - I'm going crazy with not knowing. It's been over a month since initial application.

[Deleted User]

You credit card usage isn't affecting your application at all, any more than the pretend credit score will.

Have you checked all three of your files to ensure there is nothing lurking on any of them?

Robsia2

I checked the one on Noddle. Experian only gives you the score unless you pay. I don't know what else to check. There was nothing lurking on Noddle, I wondered if someone had taken out a loan in my name or something but no.

I haven't done this on my own before - the last mortgage was with my H and we had no problems at all getting what we need.

I have literally no debt other than the above. I don't know what else it could be.

[Deleted User]

Clearscore and MSE Credit Club give you your other two reports for free.

ACG

Once the application is updated to say you have a credit card but it will be cleared in full it should be fine.

In future, when asked about credit commitments, tell the broker about everything, they can decide if it is important or not.

kingstreet

Do you have a copy of the application?

Does it have details of the existing mortgage and note it to be repaid on completion?

It's easy to forget to list everything. Mortgage goes in the same place as card debt on the Skipton System.

Robsia2

Thanks for your messages.

I have just checked the application and the existing mortgage is on and says it will be repaid but the credit card isn't. But when I spoke to the broker she said she remembered us talking about it so I did tell her.

Hopefully it will be sorted and that's all it will be.

But my stomach is still churning. If necessary I can find another few thousand for the deposit, although I was going to use that money for furniture and decorating and a nice Christmas. But I don't have £14K spare.

minimike2

Credit cards repaid in full monthly but then used for everyday expenditure are more and more commonly being INCLUDED in affordability assessments now. Assuming some of those who have commented have yet to experience this, but expect if you haven't, you soon will.

In theory, the debt isn't actually being repaid. It is just like having a hardcore overdraft. More to the point, the rationale is that all it takes is a major car repair, loss of a job, family event, etc etc and that person can choose not to pay that card in full that month. Thus becoming a revolving debt all of a sudden not being repaid.

Not sure on what the policy is at Skipton, but this is becoming a "thing".

Thrugelmir

Robsia2 wrote: »

With the credit card, there is always an outstanding balance as, even though it is paid in full every month and has been for 10 years, it's paid a few weeks behind so expenditure from between 8 July and 7 August is paid on 3 September, and in the meantime there has been further expenditure.

In effect you are using the credit card as an interest free overdraft. Settling your July expenditure out of your August income. Lenders can change their criteria in 24 hours. A lot has changed in the past ten years already.

System

minimike2 wrote: »

Credit cards repaid in full monthly but then used for everyday expenditure are more and more commonly being INCLUDED in affordability assessments now. Assuming some of those who have commented have yet to experience this, but expect if you haven't, you soon will.

In theory, the debt isn't actually being repaid. It is just like having a hardcore overdraft. More to the point, the rationale is that all it takes is a major car repair, loss of a job, family event, etc etc and that person can choose not to pay that card in full that month. Thus becoming a revolving debt all of a sudden not being repaid.

Not sure on what the policy is at Skipton, but this is becoming a "thing".

Yeah this makes sense. But this is what makes me waeary, I'm asaving to buy in the next 1-2 years, and sometimes I do think not having credit cards would be best in terms of when it comes to me buying , but then on the other hand it's like, 'showing that you can pay back credit is good' 'closing credit cards is bad' , so it's like, what does one do?
Is it best to not have, or to have them but not use them for everyday expenditure, I've heard that showing a reliance on them for everyday expenditure is bad (which makes sense as you are essentially paying a month in arreas like the commenter above says)', I don't do this anyway but yeah....

System

Thrugelmir wrote: »

In effect you are using the credit card as an interest free overdraft. Settling your July expenditure out of your August income. Lenders can change their criteria in 24 hours. A lot has changed in the past ten years already.

My comment also applies to the above too