Credit application - wise move or not?

Larches

Mrs has been notified that her credit score has dropped (still classed as 'good' though), and the reason seems to be that she has only a small amount of credit in her name and she's no longer using even that, as our spending all goes on my credit card. I know lenders do their own calculations, so a CRA's credit score isn't necessarily all that meaningful, but presumably this is still a factor that could impact any applications we make.

As it happens, we do want to open a new current account and credit card, but our concern is that we may also need to apply for a mortgage at some point this year. So would it be better for her to get a new account (with or without overdraft) plus credit card now, so by the time we apply for a mortgage she is seen as being more creditworthy, or would the recent borrowing count against us for the mortgage application - bearing in mind she would be the lead applicant because of her higher income?

If opening new accounts now is likely to hinder the mortgage application, the alternative would be for me to do it in my name alone as I expect to be less critical to the credit assessment for the mortgage, but then it just means even more borrowing in my name and meanwhile Mrs doesn't build up her record any more until such time as that mortgage is already in place.

Does anyone know which is likely to be the most favourable scenario to maximise our chances of getting a good mortgage offer and building/maintaining a decent credit record?

Brie

Does Mrs have earnings?  And is she happy for you to own a home that is in your name only?  

Talk to a bank she is already known at and see if they would allow her to have a current account and a card in her own name.  And then you could be added to that.  And she should use the card every month and pay it off in full every month to show she's a responsible adult.  

Also - is she on the electoral register?

Larches

Brie said:

Does Mrs have earnings?  And is she happy for you to own a home that is in your name only?  

Talk to a bank she is already known at and see if they would allow her to have a current account and a card in her own name.  And then you could be added to that.  And she should use the card every month and pay it off in full every month to show she's a responsible adult.  

Also - is she on the electoral register?

Yes, Mrs is the main breadwinner which is why I was saying she would be the lead applicant on a mortgage application. She is also on the electoral register (we both are). I don't expect she would have a problem getting an account and card in her own name - it's just a question of whether that's a good idea with a potential mortgage application in the offing, as I read somewhere that you should be careful about applying for different credit products in quick succession (although part of the problem is that we can't predict how soon we might need a mortgage - could be a month away or a year away, depending on when we find somewhere to buy!).

Brie

I think the normal idea is to give it a few months between applications.  So if she was to apply now then whether it's a success or not won't matter if the mortgage application is in say September.  It doesn't make her look desperate for credit.  

Then the bank will factor on the mortgage application if your combined income is sufficient to cover all the cards you both have plus the mortgage.  

Nasqueron

Larches said:

Mrs has been notified that her credit score has dropped (still classed as 'good' though), and the reason seems to be that she has only a small amount of credit in her name and she's no longer using even that, as our spending all goes on my credit card. I know lenders do their own calculations, so a CRA's credit score isn't necessarily all that meaningful, but presumably this is still a factor that could impact any applications we make.

Just to be clear - the CRA credit score is MEANINGLESS not "isn't necessarily all that meaningful" - it is literally a gimmick number based on how the CRAs think lenders might see an application - no lender EVER sees it 

"presumably this is still a factor that could impact any applications we make." - nope, it has literally no impact at all, it is not a factor at all, a lender will never see it, they take the data from your file and make a score based on their own systems (you will never see this) and decide lending on that basis. 

The way to build a credit history is simply - use credit well

Credit card - spend every month, pay off in full every month by direct debit ideally
Mobile phone contract - paid in full every month (even SIM only is fine)
Be on electoral roll which you seem to be
Some utility bills report there too

Larches

Thanks @Nasqueron, so not worth worrying about the credit score, but I still wonder about the timing aspect of applications. As Brie says above, if we apply for a mortgage later in the year it probably won't matter, but what if we end up needing a mortgage sooner - e.g. if we apply for the bank account & credit card now (with a modest credit limit) and then find a house within the next month or so. Do you know if lenders would take a dim view of that and be reluctant to offer us a good (or any) mortgage deal?

The mortgage would be in joint names either way, but with Mrs having a higher income but less of a credit history we just need to suss out which of us should apply for the bank account & credit card in the meantime (or whether we should avoid taking any credit before the mortgage, to be on the safe side).

Nasqueron

It's always wise to avoid credit applications in the immediate run up for a mortgage application but how much of an effect will depend on what you are looking to borrow etc e.g. if your partner earns £100k a year and you want a £350k mortgage with a £50k deposit it's a lot different to a combined income of £75k a year and a £500k mortgage

I'd do the application for the current account (maybe do a switch for free cash) and a credit card now if you want to have one and try and use it monthly, pay in full but it's arguable of limited effect without a good 6+ months of credit history being built up