How to get car and build credit rating for mortgage

Brian_Lefevre

Hi, first time post.

Me and my girlfriend are saving for a deposit, but don't have much of a credit history. We have always bought things from savings and not had loans. We have started using credit cards in November and pay them off at the end of the month.

We want to buy a car soon. What would the best way of buying it to build our credit history for a mortgage application? I earn £27k plus comission and my girlfriend earns £23k.

As we would be making a joint application for a mortgage in a few years is it best to take out a joint loan so it adds to both our credit histories?

How long should we wait to apply for more credit after getting our credit cards in November?

We have the money saved up to pay for the car upfront if necessary.

Any help would be much appreciated

[Deleted User]

Either apply for PCP/finance for the car or save up and buy one cash.
That choice is yours.

If you’re not looking to get a mortgage until “a few years time” then it makes little difference in the present.

Willing2Learn

Brian_Lefevre wrote: »

...We have started using credit cards in November and pay them off at the end of the month...

How do you use your two credit card accounts? Ideally, to build a good history of account conduct, you want to use these cards for budgeted monthly groceries and travel expenses. Then you should pay off the statemented balance in full each month.

[Deleted User]

Brian_Lefevre wrote: »

We want to buy a car soon. What would the best way of buying it to build our credit history for a mortgage application?

Pay cash for the car - as little as possible so you can maximise your deposit.

Then build credit history through use of cards, being on the ER and so on.

yksi

Save cash for the car and pay the insurance by the month - it will be on your credit report that way without the expense of the finance.

[Deleted User]

yksi wrote: »

Save cash for the car and pay the insurance by the month - it will be on your credit report that way without the expense of the finance.

Not all insurances report to CRA’s when choosing to pay monthly

moneywow1

Since you have the cash for a car, just buy it in cash, then keep on using your credit cards off and paying in full

No point having to pay extra on a loan/finance just to improve your appeal to lenders (which it probably wouldn't help with anyway)

Thrugelmir

Building a deposit for the purchase over an extended period of time is a better indication of how you manage your personal finances than taking on debt.

DCFC79

My tip, dont go thinking if you cancel a direct debit with say your phone provider cancels the contract, alot of people think this is the case when it isn't.

With a credit card pay it OFF in FULL as Martin would say.