Should I get a credit card to prove I can pay mortgage payments?

swh1000

I am looking for some advice. I am a young person who will, in a few years time, be wanting to get a mortgage for my first house or flat. I am wondering whether it is beneficial for me to have a credit card, use it for everyday spending and pay it off monthly, in order to prove to a mortgage lender in the future that I am able to keep up with monthly payments. Is there any benefit at all of me doing this or will this be detrimental? 

Thank you!

MorningcoffeeIV

It's a useful (and free) way of showing that you have some fiscal responsibility and are not Liz Truss.

It will also have much wider benefits than just in preparation for a mortgage.

Scorpio33

Get one and pay it off each month. The credit checks are there to inform lenders if they can make money out of you.

So its better to have a history of borrowing responsibly rather than having no history at all.

london21

Good to have one as far as you don't fall behind with payments/default. 

cymruchris

A credit card won't prove that you can pay a mortgage - but it will help your positive credit history when it comes to an application. But you need to do it right. Do buy your regular items every month (groceries or petrol) on a credit card, and then pay in FULL each and EVERY month, without fail. This will give you a positive credit history that lenders like. Don't get a credit card, spend up to the limit, and then pay the minimum payment forever. Do it right, and it'll help you, do it wrong, and it'll hinder you!

K_S

swh1000 said:

I am looking for some advice. I am a young person who will, in a few years time, be wanting to get a mortgage for my first house or flat. I am wondering whether it is beneficial for me to have a credit card, use it for everyday spending and pay it off monthly, in order to prove to a mortgage lender in the future that I am able to keep up with monthly payments. Is there any benefit at all of me doing this or will this be detrimental? 

Thank you!

@swh1000 From my experience, if the client has a 6 year credit history (which you will if you've had a current account and/or utilities, broadband, mobile phone contracts, etc.) and its clean, personally, I've never had an issue placing the client simply because they didn't have any actual credit accounts on their credit file.

In fact, I often do mortgages for clients on visas with limited UK residence (typically 2-4 years), a lot of whom never take out any credit cards or debt and even in those cases it's never stopped me from placing them with a mainstream lender.

It may or may not have an impact at the margins on the lender 'credit-scoring' (nothing to do with your Experian/Clearscore/CreditKarma credit scores) but it's more likely than not outweighed by a lot of other more important components that go into the 'credit-scoring'.

Having said all that, the received wisdom is that getting a credit-card and using it responsibly 'improves your standing' with lenders, so make of that what you will!