credit cards on mortgage application

we’re about to make an application for a mortgage and I’m wondering how they deal with credit cards? We have one card which we use for work expenses which is paid off as soon as the monies are recieved - usually two weeks later, so depending on the timing it can leave an amount on the card at the end of the month. We also use if for things like flights etc and pay those off either immediately or sometimes a little longer. A number of large enough things were put on over xmas and for a number of reasons I only paid it off yest. the balance is zero now. for the record these are small amounts, the amount owed has never gone over 4 figures.

Someone suggested closing that card and having none or getting another to show the bank. I think it would look too obvious and dont think my paying off the bill in full looks bad - albeit two months later than the expenses were accrued. Am I wrong?

From the warped perspective of a lender, no credit cards might be indicate that other lenders (or yourself) don’t trust you with debt.

They are mainly interested in the ratio of available salary to size of mortgage repayments. And any other loans you might have. Your credit cards sound okay. Like if people paid their credit cards on time all the time, that’d be half the Bank’s profits gone so like they don’t mind people sensibly availing of the credit card facilities.
Good luck with it.

The bank is likely to look for a pattern of mounting debt (e.g. you owe 1K at the end of Sept and clear it, then owe 1.5K at the end of Oct and clear it, 2K at the end of Nov, 2.5K at the end of Dec, and so on). If you go into debt occasionally but remain well within your means to repay, it shouldn’t be too big an issue.
Your bank more than likely knows about your credit card, so closing it and getting another one would probably look more dodgy.

You sound more diligent about your credit card than most people. However unless you have seriously overloaded cards with infrequent payments I don’t think banks give a darn.

Myself and missis have just payed off our cards and have effectively mothballed them. You don’t really need them these days with Visa Debit cards (i.e. the new Laser cards) accepted in lieu of credit cards online most places.

The big thing with Credit Cards from a lenders perspective is there are no missed payments, probably better if its cleared every month and there isn’t a gargantuan outstanding balance.

Credit card payments whether missed or paid now show up on your ICB record.

I have heard they do not look favourably on payments to online gambling companies etc but that’s only internet heresay as far as I know.

That’s what I thought thanks.

Last time we spoke to this bank he mentioned our non debt (mortgage is our only debt) and couldn’t believe that we didnt run two cars etc. I said we’re v conservative. His retort: so are we. And then proceeded to offer us 4.5 times our joint gross salary. He must have a different dictionary to us :angry:

If you are going to pay some money into or out of Paddy Power, Bet365, or Betfair do so using PayPal.
You can always say your PayPal transaction was for some on-line shopping.

Whatever about Paddy Power, if I was a bank and saw frequent payments to the casino in town (like someone I know has) I wouldn’t touch them with a barge pole.

Don’t worry.

Having a credit card balance isn’t a flag. What they look at is your overall circumstances, measuring your Customer/Household Profile with indicators such as:

  • Debt to Income ratio
  • Number of 30 day delinquencies
  • Total Credit Limit
  • Average debt : credit limit ratio
    etc. There are a number of measures such as these that go into calculating credit score in the US.

They want to know if you ever didn’t make payments. Payments on loans are marked as monthly commitments, and credit card balance will be similarly estimated as a repayment over time.

Flags would be high debt:limit ratios on the card, going over your credit limit. You hear a lot about corner cases such as banks going through expenditure line by line. It doesn’t sound to me like you’re a profligate corner case that warrants such examination.

Last time I pulled my report it showed all my historical balances. Bank did request a copy of some statements to confirm the 100% direct debt. More a paperwork exercise.

I would advise anyone going for a mortgage to get their ICB reports,you will see exactly what the lender will see,if there is a mistake nows the time to rectify it,bit late when all lenders have mysteriously declined you and believe me mistakes do happen.


Any clue how far back they look? I’ve a few transactions from the middle of last summer. More money came back in than went out anyway but i doubt they’ll care about that.

It’s a BOI CC so i assume going for a mortgage with AIB or UB they’d look for 6 months CC statements (it’s now 7 months) but BOI have my CC records since the beginning of time.

Yes, if you just use PayPal as a transaction broker.
However, if you preload your PayPal account with €€€’s the transaction on the credit card shows up as a lodgement into a PayPal account.

After that the bank do not know where the money in the paypal account goes.
It might still be there, it might be spent on books in amazon, ebay, or backing winners/losers in a Grade 1.

This is an advisable way of taking money out of your betting account.
Lodge it into PayPal and treat yourself to something bought on-line - you deserve it!!!

Credit Utilization is viewed, so possibly yes. I’m not privy to the decision making, but I know what they measure, and since they measure the utilization of your credit limits, then it can look favourable to have a low usage of a high limit, in the same way as 4K left on a 10K loan looks better than 4k left on a 5k loan.

I’m not privy to individual policy within Irish banks, rather I have come across these measures in an abstract sense.

We got a mortgage at the end of last year and one of the conditions of the mortgage offer was that we close the two credit cards that we have before we drew down the mortgage. We pay the credit cards in full every month (generally 1000 or so, a lot is work related expenses) but they said that the credit card payment every month was reducing our affordability in their calculations and that we would not qualify with this regular payment coming out of our account.

We did what they said but makes no sense to me, I am still spending the same every month, albeit now from my current account instead of on a credit card.

You should be getting information on the bank’s own credit cards in the post any day now :laughing:


But seriously, when the result is coming out of a risk engine, this was probably the common sense option to get you over the line. For some demented reason your profile probably showed that you’d struggle to make credit card payments in the event of a job loss. They brought down your credit utilization, as this may have been a heavily weighted variable in assessing your risk score

FWIW when we bought in Dec 2011 we were advised that it was preferable not to have any credit card. We had a Visa debit with no overdraft and apparently that was a good thing. We got our mortgage approval no problem at all (ended up spending less than offered).

Looks like it’s time to stick the credit card in the bin so.