Can you apply for a mortgage with credit card debt?

What role does a credit report play in a mortgage application?

Your credit report contains a range of information, ranging from personal details, like your date of birth and address, to financial data, like your borrowing history. This includes debt on any credit arrangements that you might have.

Can credit card debt affect your mortgage?

Credit card debt could suggest to lenders that you’re having financial troubles. This could indicate to them the risk that you may not be able to repay any new credit that you receive, such as a mortgage loan.

Is credit card debt the deciding factor in a mortgage application?

Mortgage lenders typically look at a range of factors when assessing your application, including your credit history. This gives them a wider view of your overall financial circumstances. If you have credit card debt, you may find that some lenders will still consider your application because of these other factors. They’ll also look at your debt-to-income ratio, which is the proportion of debt that you have in relation to your income. The lower this value, the less debt you have as a percentage of what you earn.

Beware, though – if you make too many applications for credit (including for mortgages) and receive rejections, lenders may think that you’re financially overstretched. Too many failed credit applications could suggest to them that you may not be able to make any repayments on new forms of credit.

If you’re thinking of or planning on applying for a mortgage, you may want to check your Equifax Credit Report & Score in advance. Free for the first 30 days then £14.95 monthly, it gives you unlimited online access to your report and score. It uses a traffic light colour system which shows you which areas you may want to work on to improve your credit score before making the application. The score also gives you an indication of how creditworthy a lender may find you.