Have loan will new credit card affect my chances of another loan this summer

tony672
tony672 Posts: 21 Forumite
in Loans
Hello Forum
I have a personal loan that I have been paying off for 3 1/2 years with 1 1/2 years to go. I will be needing another personal loan this summer of £20,000. I am a member of Experian and have an excellent credit rating, the loan finder on Experian says I have an 80% chance of getting the loan. What I would like to know is if I get a credit card now, which Experian says I am pre approved for, 24 months 0% interest on purchase and balance transfers, would getting this card have a negative affect on my chances of getting the loan I would like to get in the summer.

Thank you.
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Comments

  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    First Anniversary Photogenic Name Dropper First Post
    It depends on what other available credit and debt you have, amongst other things.

    Don't put too much faith in Experian's predictions of your chances. Affordability looks like it may be a problem.
  • tony672
    tony672 Posts: 21 Forumite
    Ok thank you, I don't have any other debt or credit cards and have not missed a payment on the loan I have. If I get the credit card do you think it would make a difference to my chance of getting the loan or give me a better chance even.
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    First Anniversary Photogenic Name Dropper First Post
    Sensible use of a card can make you look better in a lender's eyes.

    However, it also increase your available credit.

    If managed properly, it shouldn't hurt.
  • Sncjw
    Sncjw Posts: 3,508 Forumite
    First Anniversary Name Dropper First Post
    What is your income. That will help.
    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

  • tony672
    tony672 Posts: 21 Forumite
    I would say it is above the national average. Not hugely mind you.
  • tony672
    tony672 Posts: 21 Forumite
    So sensible use of the card could be of a benefit. So clearing the balance every month would be the thing to do or is paying more than the minimum payment enough, just as long as you don't miss a payment.
  • Sncjw
    Sncjw Posts: 3,508 Forumite
    First Anniversary Name Dropper First Post
    A number would help in regards to your income.
    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

  • Ebe_Scrooge
    Ebe_Scrooge Posts: 7,320 Forumite
    Name Dropper First Anniversary Combo Breaker First Post
    tony672 wrote: »
    So sensible use of the card could be of a benefit. So clearing the balance every month would be the thing to do or is paying more than the minimum payment enough, just as long as you don't miss a payment.

    The usual advice is to pay off the balance in full every month - this avoids paying any interest, and will improve your credit history.

    However, if the card comes with an initial 0% promotional rate, then it's OK to pay the minimum each month. Most Credit Reference Agencies have a marker against the card to show it's on a promotional rate - for an ordinary interest-charging card, paying only the minimum can be a sign that you're struggling. For a belt & braces approach, just pay slightly more than the minimum each month.

    The big caveat with doing this - you do need to be putting money aside every month so that you can pay off the full balance just before the promotional rate expires. Once the promotion finishes, you'll revert to their standard APR, and you'll end up paying a fair bit of interest. You do have the option of transferring the remaining balance to another 0% card, but there's no guarantee you'd be accepted - and even if you are accepted, there will usually be a balance transfer fee to pay.

    If you do go for the 0% card, make sure you read and understand the terms & conditions. Quite often, the 0% rate only applies to transfers & purchases made within the first 3 months - but then you can chip away at the balance over the 24 months. Some cards will let you make purchases / transfers at any point within the 24 months. Though be aware that the 0% will only apply for the 24 months from opening the card. So if you make a purchase in month 22, you'd only have 2 months left of 0%. It'll all be clearly stated in the T&C's, just make sure you read and understand them.

    Hope this helps.
  • lindens
    lindens Posts: 2,870 Forumite
    Name Dropper Photogenic First Anniversary First Post
    tony672 wrote: »
    I would say it is above the national average. Not hugely mind you.

    so £20,000?

    I would say you have no chance of getting a £20,000 loan
    You're not your * could have not of * Debt not dept *
  • tony672
    tony672 Posts: 21 Forumite
    Thank you, so it seems it won't make that much difference to my chances of getting a loan, it may decrease my chances slightly but won't increase them.
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