Loan Repayments and Credit

HayleyD83

Hi all, 
Having had a very brief look at the sticky threads I have quickly realised that credit scores mean nothing! Which is good news for me as mine has dropped by a fair few points recently due to me opening a new balance transfer credit card and closing an old account. Sensible money management right? My question to you good people is: I am about to apply for a mortgage and I have also saved up enough money to clear a personal loan in the hope that it would look better when approaching lenders for a mortgage as I wont have any debt. Given then closing one account and opening another recently seems to have negatively impacted on me, would I be better to wait before applying for my mortgage before clearing my loan. Ironically it feels like I'm being penalised for being responsible with my money! FYI  I have no history of any late or missed payments. Thanks for reading 

[Deleted User]

You should reduce your debts to a minimum before applying for a mortgage.  You'll lose lots of points with the CRAs for clearing your debts, but you'll reduce your risk to lenders.

One of those impacts your chances of credit, the other doesn't.

femalemonarchfemalecanine

anything or indeed nothing can affect your credit score, but only you see that, so what your score does is irrelevant, it is what is on your credit reports that matter, so having a history of sensibly handling credit is what you want, so say a credit card that is used and paid off each month is good, and having paid down any existing debt will help in getting a mortgage