Credit file and mortgage

gionnetto

Seslea wrote: »

I've been saving money in 2 different accounts with 5% interest (thanks Money Saving Expert website!) Both accounts have now reverted back to a regular interest and I'm going to continue using the main one. My first question is should I close the other one or just keep a minimal amount in there to avoid having another account with a short history?

Impossible to say unless you specify if any of those accounts is a current account. Closing a current account is a bad idea.
If your savings are in a savings account, you can close it because the CRAs don't see savings account. :beer:

Jmaho

I'm not really sure what you mean by your comments kingstreet. I work for a high Street lender and have done for many years. I was trying to give some helpful tips to a first time buyer by giving some insight as to the things that are important. We don't class everything on bank statements but we ask for latest months on each case as we do assess them and we will decline to lend if the conduct isn't satisfactory. I would imagine we're on the same page as most lenders. A credit card appli action wouldn't have much baring on the appli action so I wouldn't suggest it as being worthwhile. Not quite sure why you've taken offence to my comments

Seslea

gionnetto wrote: »

Impossible to say unless you specify if any of those accounts is a current account. Closing a current account is a bad idea.
If your savings are in a savings account, you can close it because the CRAs don't see savings account. :beer:

Ahh that makes sense now! Yes, they're both current accounts! Ok so keep it open, but does it matter if I leave money in there or take it out? Or put money in?

kingstreet

Jmaho wrote: »

I'm not really sure what you mean by your comments kingstreet. I work for a high Street lender and have done for many years. I was trying to give some helpful tips to a first time buyer by giving some insight as to the things that are important. We don't class everything on bank statements but we ask for latest months on each case as we do assess them and we will decline to lend if the conduct isn't satisfactory. I would imagine we're on the same page as most lenders. A credit card appli action wouldn't have much baring on the appli action so I wouldn't suggest it as being worthwhile. Not quite sure why you've taken offence to my comments

Taken offence? Hey, where've you got that from?

In my experience clearing banks are much more interested in current account conduct than building societies. As an example, NatWest won't entertain a mortgage application if there are unpaids or unauthorised borrowing charges in the last three months wheras a building society would set much lesser store on that.

A building society would normally be more interested in the positive conduct in the repayment of a credit card.

I was merely discussing the differences between the two and wondering if you worked for a clearing bank as you seem to be mirroring what I had seen previously.

Seslea

Just an update:

I just logged into MSE credit club today to check on my file and my score has dropped by about 100 points. I know the score means nothing but it made me check to see if there was a reason why it had suddenly dropped. I scrolled down and previously had little green smiley faces for everything except account stability and residential status, which were orange. I now have an orange face for credit utilisation with the following general note:

"Either you're using quite a lot of the credit available to you, or you've no credit accounts at all. If it's the former, this may signal to lenders that you're over-committed – if you can, pay down some of the debt you already have before trying to take out any more.

Lenders do like to see you managing at least some credit well though, as this makes them feel you're more likely to pay them back. So if you're in the no-credit camp, consider getting yourself a credit card to spend on now and then – just ensure you pay it off in full."

I then check Clear Score and it says:

"Things to Improve:
Consider taking out a credit card to build your credit history"

Any advice?

[Deleted User]

Yes.

Ignore any of the CRA’s advice and just carry on as you are.

Getting a credit card and using it and paying it back in full is about the only correct information the CRA’s give you

Seslea

Ok, thank you!
So in answer to my original question if I should do the credit card thing, you say it's a good idea to do it?

At the moment I have a purchase on finance that I pay monthly (I could settle it now but would it make a difference?) and I have about 5k credit with a mail order/store card which I pay off straight away if I use it. I think both current accounts have an overdraft but I never use it. Is that what they mean when they say I have available credit that I'm not using?

[Deleted User]

It’s up to you if you want to go the credit card route.

It’s always advisable to help build a more stable credit history.