Car purchase: Will available credit card balance effect loan application?

leev_21

Hi,

I'm looking to purchase a car funded with cash, credit card and personal loan.

I don't have any outstanding debts but have a credit card with a limit of £9,600 (full balance available) which I hope to transfer the balance to my personal bank account. I also need to take a personal loan but was wondering if this application would be affected by my available balance on the credit card?

Thank

[Deleted User]

Lenders will take both debt and available credit into account, but it very much depends on your circumstances - debts, limits and income, as well as history.

It you have several times your income available to you in credit, it may be an issue.

leev_21

The available balance on my credit card is 45.71% of my annual salary.

Am I unlikely to be accepted for a personal loan on top of this available credit?

[Deleted User]

Affordability is more likely to be an issue than the available credit.

Is that the only card you have? How much are you looking to borrow?

leev_21

Yes only have 1 credit card. No overdrafts, existing loans, finance agreements and my credit score is excellent on both ClearScore and CreditKama.

Looking at possibly £8k

[Deleted User]

Unfortunately, none of the pretend credit scores from the CRAs are used by lenders. It's all about risk criteria.

The problem you have is a relatively thin file and are asking for a high loan in relation to your income.

Certainly don't reduce your card limit, as it's quite low and the only one you have.

Try an eligibility checker to see who might accept you.

leev_21

Deleted_User wrote: »

Unfortunately, none of the pretend credit scores from the CRAs are used by lenders. It's all about risk criteria.

Which credit score do they use?

Deleted_User wrote: »

The problem you have is a relatively thin file

Sorry, what do you mean? I've had HP, BNPL and used my credit card over the past 3/4years but its all clear now.

Deleted_User wrote: »

Try an eligibility checker to see who might accept you.

Could you suggest a good one to use?

[Deleted User]

They use the one they generate themselves from assessing your data. It's unique by lender and product.

What do your credit files actually show in terms of history?

There's an eligibility checker on this site.

https://www.moneysavingexpert.com/eligibility/loans/

leev_21

Just signed up for the free experian score which shows me at 978/999

All of my closed agreements, quite a few to be honest.

[Deleted User]

leev_21 wrote: »

Just signed up for the free experian score which shows me at 978/999

That's another one that's not used in lending decisions...

leev_21

Deleted_User wrote: »

That's another one that's not used in lending decisions...

Ah, Can you suggest one that is?