Credit card/ getting a mortgage

[LawrenceSMarlow]

After some advice please 🙂
After leaving university, despite being well paid, I wasn't particularly sensible with money and accrued around £8000 credit card debt. I have always paid at least the minimum monthly payment and usually tried to pay a bit more, but it has been difficult to significantly make a dent in it until now. Now I am able to pay more and it should be gone in about 5 months. I have also had 2 bank loans, which I have always paid on time.

I am planning to buy a house with DP but not for about 2 or 3 years.

My question is: would the fact that I have had a large amount on a credit card in the past negatively affect my ability to get a decent mortgage? DP has always been more sensible and I hate to think that my choices mean he would be worse off, not that he would ever say anything like that.
Thanks for reading 😁

Your previous credit card debit will probably help you!

It shows that you can borrow money and can pay it back without defaulting. That's a good thing for a mortgage company.

If it is all paid back before you apply for a mortgage then they will not count against you (if you have credit card debt when applying, that's fine, but they will offer you a smaller mortgage). As long as you've never missed a payment, your credit record should be good.

To check, go to the Experian website. You can sign up for a free trial to check your credit record.

I'm a FTB and have just gone through the mortgage process. I had a credit card that I used to pay for fuel and cleared the balance on each month, thinking this would help my credit score, but the broker told me this is a common misunderstanding, and that having credit definitely doesn't help your credit rating, even if you have been able to pay it back on time. I work as a conveyancing solicitor and quite often there will be a clause in the mortgage offer requiring any outstanding credit balances to be discharged before the funds are released if they are concerned about the level of borrowing you have. It's mostly a concern about affordability though, so if your repayments wouldn't impact your ability to repay the mortgage, or wouldn't "look like" they would it shouldn't be too much of an issue. Every lender is different though, and you've got a couple of years to get your balances reduced. Would definitely recommend the experian free trial so you can have a look at your current score. It highlights anything that is impacting things negatively and is probably not as bad as you're imagining :)

As long as you're making repayments etc you should be fine, and it may help with your credit score.

You can go onto Experian and check your credit score for free just to give you an idea of where you and your partner are now

you can also get a hardcopy of the statutory file checks at a controlled price of £2 whenever you want, with no need to sign up for the subscription to get a free trial.

www.gov.uk/government/news/credit-reports-available-online-for-all-consumers

www.experian.co.uk/consumer/statutory-report.html

www.equifax.co.uk/Products/credit/statutory-report.html

www.callcredit.co.uk/consumer-solutions/your-credit-report/statutory-credit-report

This is all quite reassuring! Thanks for your replies, they are very helpful.