Pay the loan off before applying for another loan?

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  • David2018
    David2018 Posts: 25 Forumite
    However, it would be better still if there was person 3 who was not so reliant on the on the loans.

    So, in your opinion, what would be the ideal situation for the person 3, i.e. how many credit cards, a phone on credit (yes /no), how many store cards and store personal accounts, how many furniture loans, and how positioned in these three years (e.g. when have had opened and when to pay off or close credit account)?

    Thank you.
  • [Deleted User]
    [Deleted User] Posts: 35,242
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    A couple of credit cards, clearing in full month and a phone contract if you want one.

    Continual usage.
  • Sncjw
    Sncjw Posts: 3,500
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    How much do you earn? This is a factor in loans
    Mortgage free wannabe 

    Actual mortgage stating amount £75,150

    Overpayment start date 1/3/23.

    Starting balance £66,565.45

    Current balance £63,787.16

  • Thrugelmir
    Thrugelmir Posts: 89,546
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    David2018 wrote: »
    The second way is same person living with credits, i.e. 4-5 credit cards (paying in full after each statement), 4-5 store cards, credit accounts, 0% furniture loans and much more, only for the sake of building a credit history. No late payments, no defaults, everything in perfect standing.

    Higher number of accounts tilts the view negatively. Lenders merely wish to see that a potential borrower can manage their finances sensibly. Asking for £20k plus (in cash) is a subjective judgement. Is the borrower likely to default and disappear. Being a home owner would provide additional reaasurance in such circumstances.
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