Good credit

leodislife

So a couple of years ago I got a credit card to increase my credit worthiness, I joined ‘credit club’ on MSE and it recommended I do that, because I’ve never had loans or bought a house. I wanted to do this because I was saving up a deposit to buy a house and thought a better credit score would help me get a mortgage. Since then I have made a couple of applications for a mortgage and they have been rejected due to my credit history... but my credit score is good and there are not faults or missed payments. 

I looked into it and some lenders seem to look upon having credit cards as a bad thing because i think maybe they think that if your on a low income that it’s just another expenditure , I suppose because it’s a commitment. They recommend closing any accounts or cards you don’t use etc. But the reason I got it was to increase my credit score, I’ve even increased my overdraft several times because my Experian credit score said this was a good thing... even though I don’t need it. 

I suppose I am asking is it better to not have credit etc when applying for mortgage or is that not usually the case? If it’s better not to why is this commonly given as advice? 

And ...Should I close all my credit lines?

[Deleted User]

Your credit score isn't a factor in lending, but your credit history is. Credit cards aren't seen as a bad thing by anyone if you're using them responsibly.  

Stop following Experian's advice on building your credit profile.  It's rarely correct.

You need to start at the beginning and get copies of your three files to see what appears on each.  Hopefully you have various accounts in there that show you can manage credit.

Moneyminded

Having a single credit card that you are using responsibly (paying off in full each month or at least paying the minimums) will help to build your credit history. I would stop increasing your overdraft balance though as this will be seen as an application for credit each time and look to lenders as though you can't manage your money effectively (the opposite of what you want). Other things to consider
1. Are you on the electoral register?
2. Is your name on bills at your current address? 
3. Is your credit report with all 3 credit agencies correct?
4. What does your credit utilisation look like? 
As you have been rejected for a mortgage a couple of times now speak to a broker and share a copy of your credit file with them so they can advise based on your circumstances. The more applications you have for credit in a short period of time will count against you so don't just apply anywhere and hope for the best. A broker will be able to point you to the most appropriate lender for your circumstances.

leodislife

Well I actually used the credit car initially as a balance transfer , because I had a credit card before, that was charging a very high rate of interest (after the initial low rate for 12 months), so transferred the balance to the new card which I was advised to by a finance advisor to get a better rate. Which I then was paying off. Maybe not the most responsible /effective way of doing things at the time , I.e I paid off the debt but it wasn’t cleared every month... but it wasn’t like I was missing payments , I had a small amount of debt which I cleared in a relatively short amount of time. Anyway I can’t go back in time to change that now. 

I’m on electoral register, have bills at this address, I have saved regularly, I have a regular phone contract, I pay tax, my income isn’t high but through all the calculators on the mortgage sites I can afford a small mortgage, which is all I need. I have looked through my credit report and there is nothing wrong with it. There has been a lot of searches, but mostly it just from MSE credit Club, but there has been a search form both Halifax and RBS, even though I haven’t applied for mortgage through RBS. Not sure why that is.