Will being rejected for a credit card impact a mortgage application? And what can potential applicants do to build their credit score? David Jackson has some helpful advice
The Question
I am saving for a deposit on my first property and I am also trying to build a good credit rating. However, I’m having problems because my bank won’t approve me for a credit card.
I’m worried that repeated rejections will leave a footprint and worsen my rating. I earn £29,000 a year and don’t have any debts, so I’m not sure why this is happening. Is there another way I can build up my rating?
David’s Answer
Credit card rejections can be frustrating, especially when you’re trying to build your credit profile. Often, rejections are the result of automated decisions made by a computer system, and it’s possible you might be facing this issue due to a lack of credit history rather than a poor one.
To build your credit, consider other ways to demonstrate financial responsibility. For example, ensure you’re registered on the electoral roll, which can boost your credit score.
Also, setting up direct debits for utility bills or getting a mobile phone contract in your name can help. Just because one bank has rejected you for a credit card doesn’t mean others will. Maintaining a good credit score by paying all bills on time is crucial.
When it comes to a mortgage, the process is more thorough and manual than with credit cards. Even if you’ve faced rejections for a credit card, as long as you have a decent credit score overall, you can still be considered for a mortgage.
Working with a mortgage advisor can help you navigate this situation and find a lender who understands your financial history.
Meet our expert…
David Jackson established Prestige Private Finance in 2014 after nearly two decades in the mortgage industry. With experience in London’s high-net-worth areas, David and his team offer empathetic and expert advice for your financial journey.
If you have a question for David please email kate.saines@emap.com or leave a message in the comments below.
