This will definitely help, have you used something like Clearscore or Noddle to check your credit rating?
Any financial advisors here? Re: mortgage/car/credit score
- Thread starter ShiWarrior
- Start date
I think the first thing I am going to do is check my credit report and go from there
MSE is very helpful
MSE is very helpful
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The rate you get isn't directly linked to your credit score, the banks offer better rates if you've got a bigger deposit vs the loan. They refer to it as LTV or loan-to-value ratio, for example, they may offer a higher rate to people with only a 10% deposit who want a loan for 90% of the purchase price vs people with say a 20% deposit and perhaps even more generous rates for people with a 30% deposit.
The mortgage is a secured loan and the bank has a lien on the property; if you default they may need to repossess thus the more equity you have in the property the more of a buffer there is for them to recuperate costs etc.. and the lower the risk.
Your credit track record isn't particularly relevant unless it's throwing up red flags which stop you from being approved for a mortgage you otherwise ought to be eligible for. Someone with a better credit history isn't inherently eligible for any better deals by default, they don't get to bypass the LTV requirements, they just avoid potentially unseen reasons to get rejected for them.
Soldato
MSE is also full of smarmy tossers that all have perfect credit and have £40m in high interest accounts according to them. Get a free trial with one of the main credit reference agencies (credit karma = TransUnion, Clearscore = Equifax and Experian) and see where you're at.
I don’t think there is any magic numbers.
Lenders will use bureaus (credit ref agencies) to assist understanding your financial situation.
All loans, credit cards, bills (I think) etc get fed from lenders to bureaus. It’s a reciprocity agreement and isn’t a choice I don’t believe when operating in the regulatory framework of the FCA.
If you have no footprint, they will only have information you provide in terms of your bank balance, declared outgoings and your MDI (monthly disposable income). Many will want evidence and some modern lenders will request access to your account via open banking to check. So a lengthy current account it helpful too.
They’ll ask for a view of your salary (payslips) and how long you have been with your current employer etc…
Having demonstrated your ability to borrow money and not default is a positive for sure. But it really depends on their risk models and scoring, the LTV and your MDI.
And don’t buy the car unless you really need a new car. Cars are a depreciating asset and buying one within 12-24 months may not hinder, but it certainly won’t help.
Lenders will use bureaus (credit ref agencies) to assist understanding your financial situation.
All loans, credit cards, bills (I think) etc get fed from lenders to bureaus. It’s a reciprocity agreement and isn’t a choice I don’t believe when operating in the regulatory framework of the FCA.
If you have no footprint, they will only have information you provide in terms of your bank balance, declared outgoings and your MDI (monthly disposable income). Many will want evidence and some modern lenders will request access to your account via open banking to check. So a lengthy current account it helpful too.
They’ll ask for a view of your salary (payslips) and how long you have been with your current employer etc…
Having demonstrated your ability to borrow money and not default is a positive for sure. But it really depends on their risk models and scoring, the LTV and your MDI.
And don’t buy the car unless you really need a new car. Cars are a depreciating asset and buying one within 12-24 months may not hinder, but it certainly won’t help.
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Soldato
Clearscore is only Equifax but MSE Credit Club is Experian and it's free and I agree the MSE forum is full of smarmy tossers who think they are better than anyone else and they get protected by the forum team there.
yep
i didn't mean the forum, just the main webpage from Martin Lewis
i read his Credit Report stuff , which was why I said MSE
cheers mate
This will definitely be a good thing.
As others have said.
Credit file (not score) is the yes/no rather than the rate.
Although for us, my amazing credit score did bump up the amount I could borrow (according to the advisor).
My credit score isn't 999. But my payment history, lots of credit but low utilisation and long history made for a "A1" credit grade From lloyds
Then she said I couldnt borrow anything.. Checked it 3 times and she'd put a student loan in of 100k or something rather than 1k. Almost pooped my pants.
The 3 credit reference agencies
Experian = credit club, MSE
Equifax = clearscore
Transunion = credit karma
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Soldato
My 'score' is still shot because I have a CCJ which doesn't drop off until next year although it is paid off and marked as such.
I still have £23K credit available across my credit cards and I was accepted for HP on my Jag last year and an Amex card. I assume as soon as the CCJ drops off my score will rocket.
I still have £23K credit available across my credit cards and I was accepted for HP on my Jag last year and an Amex card. I assume as soon as the CCJ drops off my score will rocket.
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Soldato
Flashbacks to my twenties there - got my first credit card, had a rough break up and after a particularly heavy evening booked my first NYC trip.
Wouldn’t change it for the world, but those were some irresponsible times
Soldato
Checkmyfile is a useful website because it gives you a report of all the information from all 4 credit reference agencies (Experian, Equifax, Transunion, Crediva) so it's worth a free trial, saves signing up to multiple websites and makes it easier to compare the information each CRA holds on you.
Soldato
Whilst strictly true, that isn't the whole picture. A certain credit profile may open up options which aren't otherwise available - e.g. a bank which offers a lower rate may be much stricter with their "scoring" than another with a higher rate
Already addressed further down the same post:
The main issue though is simply the LTV, that's the thing that reassures banks the most and opens up the lower rates; a fat deposit. Providing you have that fat deposit then the mortgages are yours to lose via some red flags on your credit track record, they're not looking to turn down some normal person (say with a steady salaryman job) with say a 40%+ deposit for a good rate, there are no super special rates for top 1% credit ratings etc.
yeah exactly, worth it in some ways for sure. but the thought of being £2k in debt now makes me sweat.Flashbacks to my twenties there - got my first credit card, had a rough break up and after a particularly heavy evening booked my first NYC trip.
Wouldn’t change it for the world, but those were some irresponsible times
score 992
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Was about to ask if your bank account has a credit checker, my app (NatWest) does and it tells you approx loans you'd get, credit cards they'd be happy to provide and also how much overdraft you'd likely be approved for, doesn't say anything about mortgages though
I paid a couple of grand of my car on a credit card. Rest debit card from a dealership. They had no issues with it. He understood I did it for the protection. I paid off the credit card right after. That was 2-3 years ago. Also got some cashback from the credit card
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Soldato
Absolutely, I'm the same - I maxxed out my overdrafts, credit cards and pretty much everything else when I put every penny into paying off my mortgage. Credit score took an absolute beating there for a good few years.
These days even £500 on the card I can't pay off in one go has me up in night sweats, think it's a form of PTSD!
