Upcoming Re-Mortgage & Debt/Credit Score impact

Bomber_Busbridge

Hello All.

We'll be starting to look onto our re-mortgage in the next coming months. Our current mortgage is due to expire on 31 August 2026. All is fine. Payments have all been up to date. No worries there.

My credit score is good. I have a personal loan with a current balance of £1263. This loan is due to be repaid at more or less the same time as the current mortgage is due expire. I pay £218.40 a month for the loan.

I also have a current debt on an (at the moment) 0% interest credit card of £2,578.38. I currently make the minimum payment each month of around £35.00

I'm due a bonus at work of approx £2,700 (after tax & NI decuctions) in March's pay.

I want to use the bonus pay to my advantage on my debt but also potentially keeping my credit score at good or improve to have the best chance of a good re-mortgage deal.

So, my question is what is the best thing to do with my bonus payment to help do this? Do I pay the credit card in full? Pay the loan off early and some of the credit card?

I'm just not sure of the route to take.

Thank you.

BrimfulofSascha

If you choose a mortgage product with your existing lender there are no credit checks and it just rolls on with the new rate and payment, so you don't need to worry about your relatively small debt. If you wish to remortgage with a new provider there will be credit checks as part of the application process

ACG

Are there any negative markers on your credit report?

If not, then presumably you have a few years paying a mortgage, a few yeas paying a loan and credit cards.

There is no reason for you to not be able to get a remortgage at normal rates from what you have said. Unless affordability is a problem or tight, then I would just go with personal preference.

Bomber_Busbridge

https://forums.moneysavingexpert.com/discussion/comment/81912118#Comment_81912118

Thank you.

The only "negative" stuff on my credit report is the Electoral Register (I've lived at the current house since September 2021) and my current credit limit is under £15,001. Nothing classed as "critical".

Yes, I've had a number of years paying the mortgage, loan and credit card.

I'll have a good think. Paying off the loan and freeing up over £200 a month would help.

born_again

I want to use the bonus pay to my advantage on my debt but also potentially keeping my credit score at good or improve to have the best chance of a good re-mortgage deal.

Forget about the score. Lenders do not see or use the CRA's made up figure.

kingstreet

Frankly, you're probably over-thinking this and the minutiae is unlikely to have any impact on you getting the best deal.

Unless you have affordability issues, the card balance will have little to no impact and the loan ends within six months so it'll be ignored by pretty much every lender.

Angelica123

https://forums.moneysavingexpert.com/discussion/6658320/upcoming-re-mortgage-debt-credit-score-impact

Unlike the US, the UK doesn't have a credit score as such. There's no magic number to try to achieve - for lenders it's just about risk profiles.

The amount of debt you have is small so is unlikely to have a huge effect even if you go with a new provider (if you stay with same provider, credit checks become irrelevant).

What is the interest rate on your personal loan? Unless the rate is lower than the rate you could get in savings, it's probably financially better just to pay it off.