Paying off debt and applying for a mortgage

changingmyways wrote: »

Hey there. First time poster.

I am 26. However, in my earlier 20’s I was very irresponsible with money and because of this ended up with several credit cards open with varying amounts on each.

In the last month I have paid off 2 fully and now only have 2 open, one with £650 and one with £1300. I am earning about £1300 per month so I’m hoping to have this paid off I the next few months.

My worry is, however, that my partner and I are hoping to apply for a mortgage before the end of this year and I’m afraid that, due to my poor credit history, I’ll be rejected. Although I’m told not to take much notice of my credit rating, I’m currently at 845/999 on Experian and 3/5 on Noddle, both being a ‘fair’ rating.

I must note that my partner has a perfect credit history.

I guess I’m just looking for reassurance that paying off my debts and getting a mortgage by the end of the year is a plausible plan.

The first thing you and your partner both need to do is look at your credit reports at all three of the main Credit Reference agencies. You can do this for free by using Noddle, Clearscore and MSE Credit Club. It looks like you have done abit already but you both need to check all three 100% and make sure everything is correct.

Paying off your debts is good and then using one card and paying it off in full each month will build up a good history of responsible credit use. Also you should both avoid applying for any new credit as too many credit searches will be a negative when you come to apply for a Mortgage.

You say that your partner has a "perfect" credit history but it depends on what you mean by that. If they have had no credit in the past it may look perfect but will not be as good as someone who has a credit card and pays in full each month.

You should also make sure your both on the electoral roll and if not then get that sorted.

Another thing you may not have thought of is that they check your bank statements so make sure you don't have any transactions related to gambling or excessive expenditure in the time leading up to applying for the mortgage.

Finally I would say you should create a tight budget for both of your money so you can save as much as possible for a deposit/emergency fund ready for when you want to buy.