Higher credit limit with a mortgage?

Robbobss

Hello 

could anyone answer my question please 

do you in general get offered a higher credit limit on credit cards if you have a mortgage?

Or is it the same limit either way?

jackieblack

Perhaps mods could merge your two duplicate threads
https://forums.moneysavingexpert.com/discussion/6476444/higher-credit-limit-after-a-mortgage#latest

CliveOfIndia

It makes little difference - there are many factors that a lender takes into account when allocating your credit limit.

A key factor is your overall level of existing debt compared to your income - from that point of view, a mortgage is an existing debt that could potentially reduce the amount a new lender is prepared to give you.

On the flip side, a long history of good credit management is seen as a positive.  So if you've you've had the mortgage for a few years and always paid on time every month (no missed/late payments or payment holidays) then that will show a lender that you can (broadly) be trusted to pay what you owe.

On balance, I would say that a mortgage - in and of itself - will make little difference.  It's your overall credit file, your overall level of debt vs income, and your credit history (taken as a whole) that is the more important factor.

There is a (tentative) argument to say that homeowners may be viewed as more "stable" by some lenders.  But even then, how much weighting will be given to that fact will vary from lender to lender.

DullGreyGuy

Each lender has its own criteria and scoring/rating system so there are no universal truths. 

The only lender who's algorithm I ever saw (for store credit provided by the company themselves) did give weighting to those with a mortgage over renting but it wouldnt unwind the effect of a recent default for example. Other lenders may take a very different view though. 

Robbobss

Thanks good advice!