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How Limited Credit History Affects your Mortgage Application?

The old adage "No Credit is Better Than Bad Credit"  still rings true today. 

As with most personal circumstances, different lenders will take different stances. We have the likes of HSBC who has accepted cases where a client has moved to the country the day of application, and others, like Halifax who will decline a simple first time buyer case because they cannot evidence enough of a credit history.

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The key is to work with someone who knows these lenders and can place your case with the best lender for your situation. In my experience there are very few instances where a client would need to hold off applying for a mortgage based on limited credit usage alone. 

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A credit history is very useful, lenders will use this history to evidence that you are financially responsible but you don't need to start taking out loans and credit cards when you're thinking of buying a house. This can sometimes do more harm than good depending on the level of lending. All commitments will be considered when calculating your maximum lending amount and so too much of a balance can reduce the amount you can borrow. 

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If you are starting from scratch, a low balance credit card that you use for fuel or food etc can be a good way to evidence positive credit usage over time without building debt.

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Areas that will also help would be to ensure your official documents such as bank statements & your drivers license are registered to you home address. Its also useful to add yourself to the electoral register if you haven't already.

 

If you do need to discuss any aspect of obtaining your own mortgage, please do always feel free to get in touch,   

Wolfe & Co Mortgage Advice Ltd

This website is for UK residents only 

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YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR OTHER DEBT SECURED ON IT.

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Wolfe & Co Mortgage Advice Ltd is an Appointed Representative of The Whitechurch Network Limited which is authorised and regulated by the Financial Conduct Authority

 

Wolfe & Co Mortgage Advice Ltd. Registered in England and Wales. Company Number 16135638. Registered Address: 1 Mayes Park House, Mayes Park Lane, Warnham, RH12 3SG

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A fee is payable at Mortgage application, this is a lifetime fee which entitles you to advice over the lifetime of your mortgage at no further cost.  

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Wolfe & Co Mortgage Advice may receive financial compensation when referring clients to other service providers, including but not limited to Conveyancers, Surveyors and Will Writing Services. When this relates to you as a client of Wolfe & Co Mortgage Advice, details of the amount received can be provided to you upon your request

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