I haven't maxed out my credit cards, so I should be safe

One of the biggest mistakes first-time borrowers make is not knowing what lenders look at when they assess your current financial commitments.

Many believe if they have a credit card or two, it won’t make that much difference to their application, as long as they haven't spent up big or missed their minimum monthly repayments.


This is not the case though, because the lender will actually consider the limits you have on your credit cards, not just how much you owe.

This is because you could go out and spend it all tomorrow, in which case you still need to be able to afford your loan.

Get it right
One of the best ways you can avoid being turned down for a loan or getting less than you need is by reducing your credit limits before applying, or cutting up your cards entirely.

The other bonus of doing so is that you'll be less likely to notch up too much unnecessary debt.

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Jason Gwerder
Wednesday, 7 September 2022

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