Would having a credit card that has been well managed and always paid on time be good in terms of credit history in applying for a housing loan or would it be better to have no credit cards when applying for a home loan?
The existence of credit cards always detracts from serviceability.
The limit on your credit card is assumed to be maxed out (even if it isn’t) and the 3% (I think that is the minimum payment for most c/c) is then factored into your expenses.
hi brizza
the conduct on your card is important – the lower the limit the better as Woodsman said, servicing will be calculated at the credit limit not the outstanding balance or average monthly useage.
the good news is that a number of lenders will ignore the credit limit if you provide 3 or more months of statements demonstrating the card is paid in full each month.
cheers
brahms
CALL NOW…adults only (boys and girls ask mummy or daddy first) ~~ 1900 HOT BROKER ~~the good news is that a number of lenders will ignore the credit limit if you provide 3 or more months of statements demonstrating the card is paid in full each month.Brahms, which lenders do this?
ING as a matter of policy, plus others on case by case basis.
cheers
brahms
CALL NOW…adults only (boys and girls ask mummy or daddy first) ~~ 1900 HOT BROKER ~~The lower the limit the better. No credit card is best as far as a loan app goes.
Loans are processed by numbers now. In the old days a good credit card behaviour might sway the local manager assessing your ap but now it is done in a factory and numbers are all that matters.
Cheers,
Simon Macks
Finance Broker
simon@mortgagehunter.com.au
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Yes, this notion of paying off your credit card as a sign of good credit is a few generations old.
If you are good with credit then you won’t have a credit card is how they look at it now.
Brahms – I’ll be checking this with the ING!
Liz
Mortgage Lender
Liz, i’ll give you the short cut – go to Short Form Credit Policy, scroll to page 4, second box up from bottom, ING introducer website.
cheers
brahms
CALL NOW…adults only (boys and girls ask mummy or daddy first) ~~ 1900 HOT BROKER ~~Thank you!
This little snippet comes just at the right time!
Thanks Brahms [cheesy]
Liz
Mortgage Lender
1300 780 826How about store cards???
Same??Yes – re them reducing your serviceability
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