Want to know about your experience when applying for home loan whether churning bonus points from credit card signing up have any impacts with your home loan application?
Does Churning Credit Card Points Have Any Impact on Your Homeloan Application?
DaHuntz on 02/09/2020 - 13:03
Comments
Similar situation. Usually just get told that for $X value loan you will need to reduce credit card limits to $Y.
The impact is negligible.
Despite what people here (and other forums) suggest, your credit score isn't a huge factor in a home loan application (assuming no defaults).
It's all about serviceability and valuation. Banks will look at your aggregate credit limit to determine your serviceability. Lots of people will curb their credit limits and number of cards, before applying for a loan to improve their serviceability.
Of course, if you regularly manufacture spend on a card to quality for bonus points, the bank might view that as discretionary spending and reduce your borrowing capacity too.
Common sense comment about credit scores on ozbargain
This must be the twilight zone :)Credit scores are really only about whether you've kept up to date with your debt payments.
Free credit score sites like getcreditscore gives you averages for your location. Scores are pretty bad, if home loans (renting) are based on credit scores then plenty of people renting or living on the streets.
yeahnah
as long as you're not going into your loan leveraged up to your eyeballs (or able to) then you'll be fine.
Sign ups don't but the bank will see you might have credit and will ask for evidence of the status of the account. As said the min monthly payments will form part of your serviceability assessment.
I have had experience where I was rejected due to that from one bank. Long time ozbargainer collecting points was good but even after having perfect repayments and only one open at the time of the application it was not good enough for the bank.
Churned 7 credit cards since beginning of last year, still had 4 opened (2 of them had $15k credit limits) - applied for home loan and got approved subject to closing the 2 15k cards.
Take that for what it's worth.