APPLY FOR CARD TO INCREASE RE-MORTGAGE CHANCE

HammerTime22

I'm due to re-mortgage in April 2025. My credit rating shown on MSE website is only classed as 'Fair', despite not having a bad credit history & no outstanding debts other than my mortgage. Just haven't needed a card for many years (at least 5yrs)

I thought I'd apply for a credit card to use on my monthly purchases (food etc) & repay the balance on time in order to increase my credit rating. I've been accepted for a few. Again, via MSE website.

However, I'm u sure whether applying & using the card with only 6 months left on my existing 5 yr fixed rate mortgage may negatively affect my credit rating & reduce my chances of getting a slightly better mortgage rate.

Any advice would be greatly appreciated. 

Thank you.

Money_Monkey

What's triggered the fair credit score?

CliveOfIndia

You can pretty much ignore the credit rating/score you see on the CRA reports, a lender will make up their own mind based on the raw data contained in your file.

That aside, there's no harm in applying for a card now.  It's always advised not to take out more credit shortly before a mortgage application, but if that's 6 months away then it won't do any harm.  Correct usage of a card (using it to buy essential goods and ALWAYS repaying in full every month) will go some small way to building a decent credit history.  6 months is not a lot of time to build up a really solid history, but it won't do any harm.

HammerTime22 said:

I've been accepted for a few. Again, via MSE website.

Bear in mind, you haven't been accepted - the CRAs think you have a reasonable chance of being accepted.  Do some eligibility checks on the lender's own websites first before making a formal application.  Although still by no means a guarantee, they do at least know their own individual lending criteria, so tend to give a slightly more accurate indication of your likelihood of being accepted.

saajan_12

I'd look into the reasons for the agencies are giving a fair score. Usually a credit card isnt needed.
- Are you on the electoral roll?
- Have you missed any payments for bills or finance arrangements?
- Do  you use your overdraft? 

HammerTime22

Hi. Thanks for your response. Yes, I'm on electoral roll. And no, I haven't made any late payments. I think it's due to yhe fact that I haven't had or used a credit card for mote than 5yrs.

PRAISETHESUN

HammerTime22 said:

Hi. Thanks for your response. Yes, I'm on electoral roll. And no, I haven't made any late payments. I think it's due to yhe fact that I haven't had or used a credit card for mote than 5yrs.

Ignore any reference to your credit score/rating - both the number and the "fair" description. Both of these are marketing tools used by the CRAs to try and get you to apply for additional credit products, which they get a commission for recommending. Instead you need to focus on the actual data on your file - no missed payments, not exceeding your credit limits, etc.

From the sounds of it you have a thin credit file if you don't have any other credit products besides your existing mortgage. A CC isn't strictly needed but from my experience it's a very easy tool to show lenders you can use credit responsibly, which is ultimately what they are looking for. As above, you really should avoid making any credit applications in the 6-12 months coming up to your re-mortgage, as lenders can be put off by new applications appearing on your file, but otherwise use a few eligibility checkers and apply for whichever card fits your situation the best. Just make sure you always pay it off IN FULL (set a direct debit so you don't forget) as otherwise missed payments will do more damage than not having the card in the first place.