Secured loan or personal loan - whats better for credit rating

Swimmingupstream

We need to clear a couple of debts and I'm wondering if i should take out a personal loan for £25 to cover, or whether we should secure a 3rd charge mortgage for £25.... this is because we want to consolidate our mortgages next May when the 1st mortgage comes up for review..... Which will be viewed more positively by the mortgage companies?

Swimmingupstream

Just to confirm £25K

ACG

When you say a third charge, is that because you already have a secured loan or is it because  you have 2 parts to your main mortgage? 

There are not many lenders who will be a third charge, rates wont be pretty. 

There is no such thing as a credit score, every lender scores you according to their own scoring system. I dont think anyone can answer the question as to which is better for your score as it could differ from lender to lender or it may not even matter. In reality I would just do whatever is the best for you. If there is a difference it will only be negligible. 

TheAble

The more debt you secure on your property the greater the chance of you losing it if you fall on hard times. I'd suggest keeping unsecured debts unsecured.

Emmia

I'd probably also head over to the debt free boards to see if the helpful people there can help you find ways of reducing your outgoings so you can pay off that £25k debt quicker

Swimmingupstream

ACG said:

When you say a third charge, is that because you already have a secured loan or is it because  you have 2 parts to your main mortgage? 

There are not many lenders who will be a third charge, rates wont be pretty. 

There is no such thing as a credit score, every lender scores you according to their own scoring system. I dont think anyone can answer the question as to which is better for your score as it could differ from lender to lender or it may not even matter. In reality I would just do whatever is the best for you. If there is a difference it will only be negligible. 

Thanks - yes we have 1 mortgage and 1 secured 2nd charge.... so the quote we had for another second charge (ie 3rd charge) was 22.8%!!!  not nice at all. 

ACG

You could do a second charge and incorporate your current 2nd charge into that?