Reply To: Curve and mortgage applications

[Nath4n]

Good afternoon,

This is actually a niche but pertinent question that I spent a fair bit of time researching but was unable to easily get a clear answer to. To summarise briefly, credit cards report both monthly statement balance but also all payment amounts made on the account. If using Curve against a credit card, especially leading up to any financial scrutiny you’ll undoubtedly be paying down the balance PRIOR to the data being reported (i.e. usually shortly after statement date). If you ‘pay off’ the fronted payments rapidly afterwards your CC statement amounts will show just your ‘normal’ spending amount, which is used by banks / mortgage providers to calculate your ‘credit utilization’ – publicly acknowledged as the core data point used by banks to calculate your average short-term debt, and therefore the affordability of new credit.

The potential problem however is that the credit card will also be reporting your ‘payments’ each month which some CRA’s even broadly interpret as ‘spending’. You can see this data by diving into the credit card on your CRA data and looking month by month.

With a mortgage application in progress, I took a cautious approach to risk and decided to cease any curve ‘fronted’ spending against credit cards for the months leading up to and covering the application period. Whilst the risk may be low, I was not able to get clear information on exactly how banks use this data during mortgage applications (understandable as they all have their own individual internal procedures), and it’s a not too radical of an assumption to think that seeing £10k+ ‘payments’ every month on a credit card may raise some flags, whether these are automated or manual.

Hope that helps.