I am based on Sydney Australia. Looking to buy a house here. Customer of one of big 4 banks.
Long story short,
6 Months back
Talked to my bank about buying a house and discussed about my borrowing power. At that time i had 2 credit cards, 6K + 8K. I have utilized about 7K combined at that time. So bank told be to clear off the debts and reduce your credit card.
Then i managed to pay off debts and reduced the credit limit to 2K and 3K respectively.
At that time i did have a car loan too. So it made sense for me to wait.
Right now i have debts of $600 in 2k and $900 in 3k credit card. re-applied for loan and bank didn't approve the requested amount. I had cash flow to pay repayments. One of the main reason is you have multiple credit card and limit on the credit card is high.
I don't understand this logic. If you reduce the limit less than that, you can not do any shopping. Can not buy a flight ticket or furniture etc.
I have paid off the car load about 3 weeks back (4 months earlier than usual period). They also said (in negative term) "You have just paid off your car loan, that is also one consideration for this decision"
I prefer to have 2 credit cards. I keep one always at home. all the bills and monthly commitments goes from that. Other one is used to carried by me. This is simply because i have very bad time after loosing my wallet last year which had my main credit card.
- Does a 5K limit is too much?
- Why my settlement of car loan affected the home loan?
- What is the rule of thumb for credit cards (number of cards and limits) when applying for home loan in Australia?