Mortgage, Credit card and credit rating

Soldato
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I will be looking to buy a house soonish but my credit rating is average, mainly due to the fact I have never had a credit card nor even a mobile contract.

Will this have a big effect on getting a mortgage? If so is it worth getting a credit card now and using it to try and up my credit score?
 
Man of Honour
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If so is it worth getting a credit card now and using it to try and up my credit score?
getting a credit card will actually drop your credit rating initially due to requiring a hard credit search.
so it depends on how soon you want to get a mortgage.
 
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Credit rating is pretty irrelevant for a mortgage company.
They will require quite a lot of details on your financial position, 3 months banks statements, a detail of living costs estimates etc

Your better off putting your effort into making your financial position as shiny as possible, check all DDs etc to eliminate any you no longer need or could do without. Review expenditure and see if you can cut down a bit on less than necessary expenditure.
 
Caporegime
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I will be looking to buy a house soonish but my credit rating is average, mainly due to the fact I have never had a credit card nor even a mobile contract.

Will this have a big effect on getting a mortgage? If so is it worth getting a credit card now and using it to try and up my credit score?

i would think it would hurt you tbh more than help.

especially if you are going to get mortgage through the same as your main bank. they will already know your spending profile and risk.

all providers are different. some will look quite badly on gambling (tesco does). but my mate who gambles £600 a month easy was accepted fine by his local bank.

so you will get people advising do it and other s saying don't. if you have never had one and are now taking one out it may look suspicious. why do you all of a sudden need one? then going for a mortgage after cpuld deem you as a risk.

i would leave it personally. they want to know about how stable your job is. what your income is and how much of your income do you spend on non essentials every month. how many luxuries do you like to purchase and won't forgo like 2 holidays a year, etc.
 
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It used to be, but quite a few colleagues at work are buying their first houses, and have been asked about their credit rating etc

Thats utterly bizzare.
A credit rating, there are numerous options who use different methodologies, is an impression of an individual.
The dont even supply "their" number or rating directly.

There is a difference between asking if they have things like CCJs and asking what their credit rating is.

When doing my last mortgage application (ok around 4 years ago) I could see the soft search done against my details.
This confirms the address etc, it gives them a potted summary on credit cards etc loans etc but they will always still validate a lot themselves as it can be out of date or wrong.

Look what experian say "A credit score, also known as a credit rating, is a number that reflects the likelihood of you paying creditback. Lenders like banks and credit card companies will look at your credit file when they calculate your credit score, which will show them the level of risk in lending to you."

Its just a summary of financial information, its the items on it, and your financial position that matter.
 
Soldato
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Just had a mortgage application accepted. Had to provide a credit report as part of the supporting docs. Used noddle to get one and having nover bothered to look at mine was quite suprised what was contained. Had good credit anyway but the stuff it still said I had open when I probably cut the card up years ago and binned them

It doesnt hurt to take a CC our and just add a few things to it each month then pay it off. Makes life easier for the time you do need to get credit for something
 
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I know - I double checked with them. One of them has a few concerns because she moved here from Germany and doesn't yet have a full history, so she's been looking into all the ways to improve it :)

Thanks. Completely bemused by this. They all have access, it may save them pennies getting you to do it, and like most things they would validate it anyway.
 
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Just scored 964 / 999 on experian

I think that's good. would be interested to see what OP see's as average.

Pfff, 999 here ;)

Its interesting though. I have had CC since I was 18, numerous ones and a lot of available balance even though unused.
I could never work out why mine wasn't 999, I have everything ticked you would expect, perfect history etc. (Mine was in the region of 960 or so as well from memory)
Late 2017 I took out a loan to pay off my PCP. I had to take the PCP to get the manufacturer discount, and whilst I technically could have paid it in cash I am making better returns on my cash than the loan rate i could get 3.1%, so I took a ZOPA loan and used that to pay off the car PCP. My rating went down for a couple of months to around 930 then went to 999, and has stuck there since. So there is some evidence that seeing the loan being paid on time did boost my rating (was first loan I had ever taken)
I get a free rating (but not detailed report) from Barclaycard every other month.
 
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Just had a mortgage application accepted. Had to provide a credit report as part of the supporting docs. Used noddle to get one and having nover bothered to look at mine was quite suprised what was contained. Had good credit anyway but the stuff it still said I had open when I probably cut the card up years ago and binned them

It doesnt hurt to take a CC our and just add a few things to it each month then pay it off. Makes life easier for the time you do need to get credit for something

Ive got one of them which I never managed to fix yet. An old card, suspect it was Egg, that still shows as active probably 15 years after last use. I did briefly try to work out who to talk to but didn't manage. I was concerned that somehow it may get into dodgy hands, I may pick that challenge back up later this year. I also have some cards I really should get round to cancelling as well, cards I have taken for the 0% transfers etc that I have paid off but never bothered to talk to the lender to say please cancel.
 
Soldato
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It will make zero difference, if anything it could harm it.

They specifically ask you if you plan on getting more credit or have any big purchases coming up.

They are only really concerned with if you can pay, if you have any existing credit and if you have had any past defaults.

They check this by taking your salary and deducting all your known (travel, gym, phone) and projected (mortgage, bills, council tax) expenses.

When we got our house my wife had never Any credit, contract phone or even a direct debit. It wasn’t a problem at all.

The key is not overstretch if yourself with the borrowing.
 
Soldato
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Thanks for all the helpful replies. Seems like mixed opinions. I should have mentioned I already own a property which is going on the market soon. When I bought that I didn't have any credit score, so had to pay double deposit. I'm worried this will happen with the new property I'm hoping to buy which will be bigger and more expensive. My credit score on noddle was 3/5 IIRC, so average, was thinking if a CC will boost it, but from posts here it seems not all providers take it into consideration.

Might be worth getting a credit card anyway? Even though I don't need one financially, I live relatively simple and frugal.
 
Soldato
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Some myths here.

I have worked as a mortgage underwriter (residential and BTL) since 2006 for various lenders (I wont say who) but....

1. Those credit score things are completely meaningless to mortgage providers - mortgage providers have their own internal scoring system which is based on a vast matrix of information, every lender is different and it is all based on statistics and risk indicators, its actually a very complex scoring system.
2. Voters roll history is by far the most important thing you can have, if your voters roll history matches your address history, thats half of the job done right there
3. Unsecured debts (residential specifically) can affect your applicaiton, all lenders now have to do affordability calculations since MMR (mortgage market review) kicked in, somewhere around 2014 (dont quote me on that!) but (although slightly simplified for this forum) they basically look at your income vs your outgoings. Most of the outgoings are based on ONS statistics for someones age etc, otherwise they would need to go through every single trasnactions on your bank statements to see how much you spend on food, travel, closthes, bills etc etc (although there are apparently some lenders that do this lol!) the vast majority dont. However, debts are debts, loan outgoings/credit cards are what they are and will be deducted. Most lenders also specifically look at things like childcare costs, ground rent and service charges.
4. The old credit card will improve my score debate - actually yes it will, but it doesnt make that much difference. But lets look at some of the above comments - the hard search will marginally affect your credit score, but I would say the benefits outweigh that, most credit providers a single search, even recent will not affect the lending at all. Its only when you start to see 6, 7, 15 searches in teh last few months that then becomes a concern. If you have a credit card that you repay every month (so you dont pay interest) it wont cost you anything, and will improve your traceability, also particularly if you keep phoning them every month to get your limit increased, having a high limit/low balance is a positive, because it shows, despit the fact you have the available credit, you are not using it, and that shows good financial stability.
5. loans, car finance any other debt really only hurts you, and never ever (ever) take out a payday loan of any form
6. Despite what you might think, most mortgage applications are quite closely looked at by a real human, like me, and you wouldnt believe the amount of personal informaiton we can get about your and your property. Provided you have reasonable explanations for anything unusual, its normally not a problem, but never lie, believe me they will know.
 
Soldato
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I've just recently had a mortgage application approved and I had to provide an Experian credit report to the broker. Barclays also said they'd check my credit rating.

Yea the brokers generally will because rather than take people's word for it with regards to if they have adverse credit missed payments ccjs etc, they just get you to do a search.

A lot of broker firms don't have access to proper credit searches, and they don't want to waste their time otherwise.

I've never worked at Barclays (although never say never!) I could add it to my list haha, but likely just meant their internal scoring system which may or may not factor in your credit score as such.

I'd be very surprised if their scoring system was based on your credit score alone, but as I said I've never worked there some lenders have some odd quirks.
 
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