Mortage application query (future)

creditchat

Hello everyone

I'm not actually applying for a mortage as yet, but intend to do so perhaps over the next year or two (no plans to do so in what appears to be a peaking market).

I'm concerned that because I have no credit history this might impact on any mortgage application (including getting best deals) I might make in the future. Now, as for me, I'm in my 30s and earn quite a bit more than the national average wage. I also have fairly substantial savings and will be able to afford a 25% deposit comfortably. I've also never been overdrawn at the bank.

On balance, therefore, if I take no action between now and when I eventually apply for a mortage, to generate some credit activity, what should I expect? Will lenders correctly view me as the low risk borrower I am or is it likely to be a bumpy ride?

Thanks for any useful input!

poppy_f1

if the lack of credit history is worrying you, you can always get a credit card and pay in full every month, even if you just use it for petrol then clear the balance, that would help build up a history

Martinslovechild

Even a mobile phone payment history can find its way onto your credit report.

Ensure you're on the Electoral Roll. I would also obtain copies of your credit reports to determine exactly how much activity there is currently showing on there.

As poppy_f1 says, a credit card is a good route to building a history. Just ensure that you clear the balance each month so as not to incur any interest charges. I would recommend a cashback card such as Egg Money as you'll also benefit from 1% cashback from all your purchases. Check the Egg website for details.

creditchat

Thanks poppy and lovechild. I don't have a credit card or monthly tariff phone and already understood how these can set the ball rolling.

So, I appreciate the points you make, but just to get a handle on things, despite my healthy financial position and anticipated 25%+ deposit (with the other 75% being a reasonable multiple of salary), if I were not to develop a credit history between now and any mortage application, do you consider that it would still be likely to be to my detriment in practice?

Thanks again

Rick62

Yes. No credit history = no credit score = no borrowing. Its mad but true. Do as poppy and martin say, then you should be OK.

creditchat

Okay, many thanks to each of you for your input, much appreciated.

A loosely related question if I may. I am living in a shared house in one city, to which none of my mail is delivered. For personal mail, banking, employment and Electoral Roll purposes I am registered to my parent's address in another city. The primary reasons for this is that I don't get much mail (and can collect it from my parents regularly) and also I view it as being generally more secure this way than having anything delivered to the place where I actually stay; it also means I wouldn't have umpteen correspondents to update if I should I change address (not that I've done that in two years).

On any credit application, given that I don't really want to be associated with that 'current' address, what is the best way to play this? Would it be better just to make no mention of the address and put down my parent's one as my 'permanent' address, or should I mention it (in the spirit of openness) but try to ensure that all correspondence goes to my folks' address? Bearing in mind that there is absolutely nothing (apart from my car insurance) registered in my name to that address.

I hope this makes sense. Again, any input warmly welcomed.

poppy10_2

I'd put the parents address down.

creditchat

Thanks poppy

That's what I had/have in mind, but I've got the inevitable niggle about putting something down that's not strictly correct. You think it's not really an issue then and I'm worrying over nothing?

As you can see, I'm above board.
Cheers

poppy10_2

I kept my parents address for all official purposes for 2 years after I moved out. All you current bank documentation and your electoral roll registration are at your parents house - if you put any other address it will just raise red flags. These checks are all automated, if your addresses match what they've got on their system that's all they care about.

creditchat

Okay thanks again Poppy, that puts my mind at rest a bit.

creditchat

Hopefully some of you who responded above will still tune into this thread.

After some further consideration I'm wondering whether applying for something like the Capital One Classic credit card might do the trick, given that they don't seem to be hard to obtain. I realise the interest rate is ridiculous and the service levels leave something to be desired, but that's not my primary concern at the moment.

Any thoughts on this? I am registered on the Electoral Roll, have various bank/building society accounts registered to the same address, am in permanent UK employment and (obviously!) not bankrupt.

Does anyone envisage any pitfalls with this approach/card or have any alternatives to recommend?

Thanks again!