Stoozing is a false economy - cost to credit rating

Legacy_user

Stoozing is a false economy

Nebulous2

Eh? The whole point of stoozing is to make use of the cash to your advantage, not to spend it. If there is an issue with your level of borrowing you simply pay it back.


I've posted my experience with mortgages before. I stoozed over 30k, mainly for my own entertainment, not expecting to need to borrow anything. Then I decided to buy a second home - partly financed by mortgaging my primary home. I spoke to Nationwide they told me I needed to take my credit card debt down to under £10k. I did that and the mortgage sailed through.

bsms1147

Simple answer is don't stooze to such high amounts if you're planning on taking out large credit products, like a mortgage, for the exact reason you describe.

pinknsparkly

My husband and I are currently stoozing with 4.5 years left to run on a 5 year fixed rate mortgage. I will avoid making credit card applications in the months prior to the mortgage application and pay down the credit cards to a level that is acceptable to mortgage providers. Yes, it may well cause problems if you've made a number of card applications just before applying for the mortgage but otherwise it shouldn't cause you problems!

System

I can only conclude people stoozing 10k+ must be on a Mich higher income than me? (Mine is low but full time) - I was stoozing 1200 on one card (nearly full limit) and had a cash back card with approx same limit for everyday groceries, I was 70-80% utilised, my "score" dropped like a rock till I cleared it, I tried to take a third card out after that and I thought that utilisation would be better if the old card was left unused but I was declined which I took as an indication that I was overstretching what my income would allow me to borrow

I am concerned about mortgage affordability (although that would've improved 5 years in), and I'm concerned about being judged to have too much available credit for my income, so I don't have an overdraft facility

Stoozing can steer you towards longer mortgage fixes, which is fine if you want that certainty at the extra price but if you're looking at cheaper 2 year fixes it wouldn't be as viable

I thought to myself that on a lowish income that maybe the way I can borrow most of all (and focus on pension instead) is to repay mortgage slowly rather than use cards since cards even on minimum payment still are clearing debt much faster than an early stage mortgage (1% a month vs 3% a year)

molerat

MatthewAinsworth wrote: »

I can only conclude people stoozing 10k+ must be on a Mich higher income than me?

Not necessarily. I am on a "low" pension income and was stoozing well in excess of £10K at the peak, in fact just under double my income. Only a £2700 leftover now due to the lack of opportunity of both offers and where to put it.

System

Molerat - how did you achieve that? What am I doing wrong? Thanks in advance (I could've made more attempts applying, but my "credit score" (for what that's worth) improved up to a point, into the 'good' range and never increased after that, and the only bad thing I have is a stooze a couple of years ago, thus I'm nervous of a longer lasting impact than people believe. I also got declined on a current account once, although that could've been that when you upload photo ID and statements it was a tiny bit blurry due to cheapo phone)

I mean I have 1 or 2 preapproved offers from clear score but the two times I've applied for a 95% chance of a good product it was either declined or offered a rubbish alternative - I suppose that's possible

FYI whilst I was stoozing before, now its more about sparing an investment from sale to pay for a future wedding, or dipping into emergency funds

System

Come to think of it, are you mortgage free, molerat? Since that would certainly help you stooze more

Ben8282

For an individual who has been using credit cards for decades, especially those who had established credit profiles during the credit card proliferation of the 1990's, having sufficient available credit to stooze £40,000+ is probably not uncommon.
The problem however is with how to actually make a profit. Existing customer offers, at least for me, are not good. The typical offer at the moment appears to be 12 months with 3% fee. Fine I guess if I had a sudden unexpected large expense that I wanted to repay over time, but useless for stoozing purposes.
That means that stoozing really requires new applications to be made (0% purchases preferably or 0% no-fee balance transfers perhaps when a no-fee 4.9% money transfer offer is available which can be repaid almost immediately from the balance transfer card).
This of course limits stoozing possibilities to whatever credit limits are given on the new cards. As to whether or not you consider the current interest rates make stoozing worth bothering with, that is very much a matter of personal opinion.

System

For those looking to make a return I think its OK to invest it in something like VLS20 as long as you don't rely upon selling that to pay it back or can stomach a small unlikely loss if you were to sell it, in other words, accelerating investment you would've done anyway, much like prioritising that over clearing a mortgage.

From what I can tell your affordability goes further with mortgages than it does with cards, would people agree? I've read that debt to income ratio only considers minimum payments but even a CC's minimum payment is a higher % than that of a (early stage) mortgage - and that what you do stooze has about 7x effect on how much you can borrow

adindas

MatthewAinsworth wrote: »

From what I can tell your affordability goes further with mortgages than it does with cards, would people agree? I've read that debt to income ratio only considers minimum payments but even a CC's minimum payment is a higher % than that of a (early stage) mortgage - and that what you do stooze has about 7x effect on how much you can borrow

It is common sense not to apply for new credit card which will maximise your credit utilisation thorough stoozing if you are about to apply for a major credit such as Mortgage. Nowadays the profit from stoozing is not as it used to be. In many cases today it is probably not worthy the effort anymore.