Does having a credit card affect a mortgage application?

Will a credit card affect my mortgage application?
Can I buy a house if I have a credit card?
Can you apply for a mortgage with credit card debt?

If you’re thinking about or in the process of applying for a mortgage, you might have wondered if having a credit card could affect your application.
this guide, thimbl answers some common questions about credit cards and mortgages.

What do lenders look at when assessing a mortgage application?

Lenders look at several factors during their decision-making process, including your:

• Ability to afford the mortgage repayments
• Current financial circumstances, including employment and income
• Existing credit commitments, including any credit cards and loans
• Credit history
• Credit score
• Deposit and the cost of the property you’re hoping to buy

Will a credit card affect my mortgage application?

Yes, a credit card will affect a mortgage application, but the impact will depend on how you manage your account.
As we’ve talked about in the section above, when assessing your mortgage application, lenders will take many factors into account. They’ll take an in-depth look at your credit history and financial situation, including any current credit accounts. Therefore, it’s important to make sure your credit commitments are handled responsibly.

Could a credit card have a positive effect on your credit score?

Some credit card habits could affect your credit history and how a mortgage lender assesses your application. For example:

• You your repayments on time each month.
• You stay well within your credit limit. Your credit limit is the maximum amount you can borrow on your credit card.
• You typically keep your credit utilisation around 30% or less. Credit utilisation is the amount of money you’re using of your overall credit limit and is shown as a percentage. For example, if your credit limit is £500 and you spend £100, your credit utilisation is 20%.

Could a credit card harm your credit score?

Some things to bear in mind include:

• You have a history of late or missed repayments.
• You have a high credit utilisation.
• You’ve used your credit card to withdraw money from a cash machine, known as a cash advance.

Using a credit card during a mortgage application: is it okay?

Generally speaking, you could if you need to continue using an existing credit card while in the process of applying for a mortgage. However, it's important to keep your spending affordable, make repayments on time, and avoid taking on unnecessary debt.

Can you use a credit card after a mortgage offer?

Yes, you could use your credit card after receiving a mortgage offer if you need to, but as always, you should never spend more money than you need to or can afford to repay.

It’s important to note that a mortgage offer is not legally binding and can be withdrawn at any time before contracts are exchanged. If your mortgage offer is withdrawn for any reason, you may need to reapply and undergo new checks.

With this in mind, if you do choose to use your credit card, you should do so responsibly. Aim to keep your credit utilisation below 30% and ensure your repayments are made on time.
Where possible, try to make more than the minimum repayment each month — doing so could reduce your balance quicker and lower your credit utilisation.

Can you get a mortgage with credit card debt?

You could be eligible for a mortgage if you have an outstanding balance on your credit card, although this will depend on your wider financial circumstances and the lender you apply with.

Lenders will look at your existing debts and financial commitments when assessing whether you can afford mortgage repayments. Credit card debt could affect how much you're able to borrow, but it doesn't automatically mean your application will be declined.

Before applying for a mortgage, some people prioritise clearing existing debt.

Applying for a mortgage with no credit history

If you’ve never borrowed credit or paid bills in your name, you may have what is often referred to as a ‘thin’ credit file. While each lender’s criteria are different, it’s worth noting that a thin credit file could make it more difficult to be approved for credit. Without any evidence of how you’ve handled credit commitments in the past, lenders may view your application as riskier.

If you have a thin credit file, you might want to research ways to build your credit history before you apply for a mortgage.

Credit cards for mortgages

While a ‘credit card for a mortgage’ isn’t a specific product, there are credit cards that could help you build credit history and improve your score. Building a good credit score can take time, but if you can demonstrate to a lender that you have a history of making your repayments on time, this could have a positive effect on your mortgage application.

Will a new credit card affect a mortgage application?

Important: If you’re planning to make a mortgage application in the near future, you should be mindful of making new credit applications beforehand.

When you apply for a credit card, the lender will complete a creditworthiness assessment, which will include a hard search, an Open Banking check, or both. A hard search will be recorded on your credit file and will be visible to other lenders for up to 12 months, depending on the credit reference agency. Multiple hard searches within a short period of time could cause your credit score to decline and harm your chances of being approved for a mortgage.

How the thimbl Credit Builder Credit Card could help you build your credit score

1. Use the thimbl Credit Builder Credit Card to pay for a necessary and affordable purchase.


2. Make at least the minimum repayment each month. If you can, you should aim to make more than the minimum repayment.


3. Your repayments, including any late or missed payments, will be reported to the credit reference agencies (CRAs). If you manage any other credit commitments in the same positive way, you could see your credit score improve over time.

Who can check their eligibility for a thimbl Credit Builder Credit Card?

You can check your eligibility for a thimbl Credit Builder Credit Card with no impact to your credit score.*

You must:

• be aged 18 to 75
• be a UK resident with at least 1 year's UK address history
• have a monthly net income of at least £800
• have an active credit account that has been open for a minimum of 4 months
• not already hold a Zable credit card

thimbl is a credit broker. The thimbl credit card is powered by Zable, a trading name of Lendable Ltd.

Lendable Ltd is unable to consider applications from anyone who has declared bankruptcy or is in an Individual Voluntary Arrangement (IVA).

Are you struggling with money?

If you’re worried about your finances, the following organisations offer free, impartial money and debt advice: StepChange, MoneyHelper, Citizens Advice, and National Debtline.

*If you choose to make a full application, a creditworthiness assessment will be carried out by Zable. This will consist of a hard search and a further check powered by Open Banking. A hard search will remain on your credit file for up to 12 months, and multiple hard searches within a short period of time could harm your credit score. Any credit obtained upon successful application will be provided by Lendable Ltd.  Eligibility and/or pre-approval do not guarantee acceptance.